Latin Americans are becoming a force to contend with in US housing markets, following revelations that the purchasing power of this demographic has more than doubled over the last ten years.
A new report from the National Association of Hispanic Real Estate Professionals (NAHREP), titled “The State of Hispanic Home Ownership 2011”, revealed that Latino’s purchasing power as a demographic reached $1.1 trillion by the end of 2011, and this figure is projected to increase to some $1.6 trillion by the end of 2016.
NAHREP pointed to a number of factors behind this growth in the number of Hispanic home buyers, including the rapid population growth (Hispanic population has tripled over the last 30 years), dramatic employment growth, the population’s relative youthfulness, and its growing level of income.
Further evidence of increase Hispanic purchasing power comes from the most recent census. According to the latest Census Bureau data, 53% of all new owner-occupants in 2011’s third quarter were Hispanic.
In line with this, a Fannie Mae survey carried out in 2011 revealed that around two thirds of those Hispanics who currently rent plan to buy a home at some point in the future.
Carmen Mercado, President of NAHREP, said that although the Hispanic population had suffered significant losses during the housing crisis – just like everyone else – there are many young Latino families who haven’t been affected, as they were all too young to buy homes when the problems began. Instead, they are only now just getting ready to enter the housing market.
“When they do, they will have an exponential impact on housing sales,” claimed Mercado.
David Stevens, President of the Mortgage Bankers Association, added that new household growth is expected to be greater for Hispanics than any other demographic in the US.
“The need to recognize the most critical variables in housing type, price range, affordability, and mortgage product terms will be critical for all housing stakeholders — from lenders and [real estate professionals] to policy makers — in order to ensure that the home ownership needs of Hispanics and other Americans are met,” explained Stevens.