New research reaffirms how important Hispanic consumers are for the future of housing in America
The numbers speak for themselves: in 2015, the number of Hispanic-owner households saw a net increase of 245,000, accounting for 69 percent of the total net growth in U.S. homeownership; altogether, Hispanic household formations rose by 486,000 in 2015, which comprised 37 percent of all U.S. household formations.
Those eye-opening statistics came from the State of Hispanic Homeownership Report, a yearly study from the National Association of Hispanic Real Estate Professionals (NAHREP) that examines Hispanics’ increasingly pivotal role in the U.S. housing market and broader economy.
Here were the five most striking findings from NAHREP’s report:
1. The Rising Homeownership Rate – The U.S. homeownership rate has been falling steadily since the housing bubble burst, and in 2015, the rate of homeownership for nearly every major population group declined. Hispanics, however, resisted that trend, and in a major way. According to Census Bureau numbers, the Hispanic homeownership rate rose more than 2 percentage points in 2015, jumping from 44.5 to 46.7 percent.
2. Historical Precedent – Those 2015 numbers were no anomaly, as Hispanic homeownership has been skyrocketing for some time now. Since 2000, NAHREP reported, Hispanics have accounted for 52 percent of U.S. homeownership growth. In the last 15 years, the number of Hispanic homeowners has grown 67 percent, rising from 4.242 million to 7.089 million (a net gain of 2.847 million homeowners); by contrast, the number of white homeowners fell 85,000 in that same time period.
That trend shows no sign of slowing down – according to a study from the Urban Institute, Hispanics will account for 52 percent of new homeowners from 2010 to 2030.
3. A Population Boom – Hispanics are also driving the overall population growth in the U.S. From 2014 to 2015, the Hispanic population grew 1.6 million, and at 57 million, Hispanics now comprise 18 percent of the country’s total population.
Roughly 21 percent of the Millennial generation’s 72.2 million people are Hispanic. According to the Mortgage Bankers Association, Hispanic households will grow by as many as 5.7 million in the next decade, and will drive total U.S. household growth through 2024.
4. Rising Incomes – From 2012 to 2014 (the most recent year for which we have data), Hispanic median income rose 7.3 percent, increasing from $39,600 in 2012 to $42,492 in 2014. Along with rising incomes – in 2014, 43 percent of Hispanic households earned over $50,000, 35 percent earned over $75,000 and 14 percent earned over $100,000 – Hispanic poverty also declined, falling to 23.7 percent.
5. Economic Power – Finally, with its population and income rising strongly, the Hispanic population’s spending power has increased considerably. NAHREP reported that in 2015, Hispanic purchasing power was $1.5 trillion, a 50 percent increase from 2010; by 2020, Hispanic purchasing power is expected to rise 33 percent more to $2.0 trillion.