Homeownership is the single most powerful tool for closing the racial and ethnic wealth gap. To underscore this point, Latino homeowners have 28 times the wealth of Latino renters and a median net worth of $171,900 compared to $6,200. The wealth gap between Latino families and their non-Hispanic white counterparts narrows considerably when comparing the household wealth of Latino homeowners to that of non-Hispanic white homeowners, underscoring the power of homeownership in bridging the racial and ethnic wealth gap.
Latinos are aging into their prime home-buying years and are projected to account for 70% of homeownership growth over the next 20 years. The demand for housing among communities of color is there; however, the severe undersupply of housing poses a threat not only to closing the ethnic and racial wealth gap, but to the future economic growth of our country.
Looking at homeownership more broadly, history suggests that housing activity has helped bolster economic growth following past recessions, and according to the National Association of Home Builders (NAHB), housing makes up 16.3% of the U.S. GDP. High homeownership rates are a goal worth fighting for.
According to findings from the National Association of Hispanic Real Estate Professionals (NAHREP) and Up for Growth, these are the realities for Latinos:
So, how do we gain momentum on housing? The No. 1 priority is addressing the national housing inventory and affordability crisis by building more homes. Expanding access to credit and fostering a lending environment conducive to the growing share of Latino homeowners is also critical. In addition, we must ensure that first-time homebuyers have access to competitive financing while empowering the real estate industry, policymakers and future homeowners with tools and resources that help increase Hispanic homeownership. NAHREP’s free resources include a bilingual glossary of industry terms, a tool that tracks congressional district rankings by Hispanic homeownership rate and other publications that highlight Hispanic homeownership and wealth trends.
Finally, championing immigration reform will help solve the labor supply shortage and boost our economy. NAHB has reported the correlation between high immigration rates and increased construction. In fact, 56,000 immigrants entered the construction labor force in 2018—a drastic drop compared to the 130,000 who entered in 2005.
Greater investment in housing is needed now more than ever to unleash the homeownership growth potential inherent in our demographic vibrancy.
For more information visit https://nahrep.org/.
Luis Padilla is the 2022 president of NAHREP and CEO of The Padilla Team at RE/MAX Advance Realty.
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