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Hispanic Heritage Month is a month where we not only celebrate our triumphs as a community, but it is also a platform for voicing the most pressing issues our Latino community faces. Homeownership is critical. Access to homeownership has historically and continues to be the cornerstone of wealth creation as it is the gateway to the middle class. But it’s so much more than that. Home is also the center of the family, where people who love each other gather together, honor traditions, celebrate accomplishments, and work out challenges. That’s essentially what Hispanic Heritage Month is really all about. 

Latinos are a driving force in the U.S. economy. Not only are they predicted to account for 68 percent of the U.S. population growth between now and 2060, but they also are set to account for 64.8 percent of the labor force growth over the next 10 years. In the housing industry, Latinos are expected to make up 70 percent of new homeowners over the next 20 years and the majority of new household formations. In fact, all new households and new homeowners in the next two decades will be from communities of color. While these predictions are rooted in demographics and the youth of the Latino community, their translation into power and economic mobility will depend on the policies put in place. 

There is currently a Latino/non-Hispanic White wealth gap, that while closing, remains substantial. Homeownership is the greatest tool we have in closing that wealth gap. The median net worth of a Latino homeowner is 28 times that of a Latino renter, and when you control for homeownership, the Latino/non-Hispanic White wealth gap ratio is cut by more than half. It will be imperative that we ensure that Latino families have access to homeownership opportunities in order to close the wealth gap and continue to see vibrant economic growth in the U.S. As we celebrate the accomplishments and contributions of Hispanic Americans this Hispanic Heritage Month, we can’t forget that our work is not done.   

First-time homebuyer education for Latinos is not much different from that of any first-time buyer, but the most important factor is access. What are mortgage and real estate companies doing to access the Hispanic market? If the answer isn’t hiring and representation, they are missing the mark. The industry needs to be reflective of the populations it serves. That means representation in all levels of the business: from marketing, sales, and underwriting, all the way to c-suite executives. Understanding cultural nuances and prioritizing market segments needs to come from the top.  

More Latinos are ready to buy a home today than ever. In 2021, there were a total of 8.3 million Latinos aged 45 and under who were considered “mortgage-ready,” or have the credit characteristics to qualify for a mortgage, and an additional 3.4 million were near mortgage ready. This is double what we saw in 2015 and nearly on par with potential non-Hispanic white borrowers. However, they can’t buy what’s not for sale. Housing supply continues to be the greater barrier Latino first-time homebuyers face. It’s up to the industry and the public sector to work together in order to ensure that first-time homebuyers who don’t rely on generational wealth are able to compete in today’s market. Down payment assistant programs that enable individuals to compete with large down payments or all-cash buyers is also essential.  

As many Latinos are first-time homebuyers, low down payment products, such as those offered by the Federal Housing Administration (FHA), have been critical to helping individuals begin their wealth building journey through homeownership.  However, the heightened housing shortage crisis has created steep market competition, with buyers bidding against cash offers, large down payments, and institutional investors. Borrowers using FHA loan products are at a particular disadvantage. As industry professionals, we can play a role in dispelling myths surrounding FHA and other low down payment products, ensuring that first-time homebuyers are not automatically overlooked. Listing agents, in particular, have a lot of power in framing offers to their sellers.   

Additionally, mortgage companies can pay attention to the products they offer and ensure that pricing is fair and competitive. NAHREP has long advocated that loan-level price adjusters (LLPAs) create undue burdens on communities of color, particularly in a rising interest rate environment. For loans already covered by private mortgage insurance, LLPAs should be eliminated.