News & Resources

This is a month when we highlight and celebrate Hispanic American achievement and the many contributions the Latino community makes to the United States in many areas of our national life. It’s also a time to shine the light on efforts to improve the lives of Hispanic Americans and hold important discussions about what is needed to strengthen the future economic security of our families.  

There’s a very significant, vital connection between Hispanic Americans and homeownership. There is a convincing correlation between wealth building and homeownership, and between strengthening neighborhoods and homeownership. Homeownership not only helps many families build wealth, but it also plays an essential role in connecting individuals and families to their neighborhoods and making people feel they have a stake in what happens in their communities. Our continued effort to ensure that young families in America, many first-time homebuyers who are increasingly Hispanic, are able to grab the first rung on the economic ladder in what often has the potential to be a life-changing and life-enhancing event is critical to building a strong country.  

Hispanic Americans value family. I know this first-hand as the son of a Mexican-American mother and the grandson of Mexican immigrants. I was blessed to have the Mexican culture be a large part of my upbringing and beyond. For all the reasons we have heard in this series, the home is at the center of that life. It is where our families raise their children, where we grow and nurture dreams in a free country. It’s also where we gather with our immediate and extended family for life events. We all want the same thing: a safe, secure, and healthy home in a safe, strong community. It is at the heart of family life for all Americans, and that is especially true for Hispanic Americans. 

The Hispanic homeownership rate in the United States rose over 3 percentage points between the second quarter of 2017 and the second quarter of 2020, prior to COVID-19. Headed into the pandemic, Hispanic Americans constituted the largest percentage of homeownership growth in the United States. In 2021, Hispanic homeownership was up to 48.4% from 47.5% in 2019. Hispanic Americans have represented 50% of the growth in homeownership over the past 10 years and are projected to make up 70% of new homebuyers in the next 20 years. That’s an incredible statistic. 

As someone who ran the FHA twice and under three Presidents, a program that lends significantly to first-time homebuyers (more than 84%) and a large portion of that lending to Hispanic Americans (25%), it’s imperative that we continue to reach out to Latino communities through financial literacy/educational campaigns, affirmative marketing, and through hiring Hispanic Americans within the housing industry who are closely tied to our communities, whether its realtors, loan officers, counselors, or financial advisors. FHA funds a nationwide network of Housing Counselors who educate prospective first-time homeowners and help improve financial literacy and decision-making around homeownership – making sure individuals or families looking to purchase a home are ready so that homeownership is not only achieved but sustained. FHA is a critical component of that outreach but by no means the only avenue, as the USMI members know well. FHA’s role, however, is highly reflective of the trend in Hispanic American homeownership and the desire of Hispanic Americans to own, and of our younger families and households looking for opportunities to become owners and to create the stability and security afforded by homeownership in their lives.  

Private lenders, non-profits and housing advocates, government-sponsored enterprises, and government programs at FHA, VA and USDA need to continue to team with one another to ensure they reach Latino communities and make homebuying opportunities and assistance readily available.  

The greatest aid to Hispanic Americans, however, will be what is good for all Americans – reducing the barriers to homeownership at this time by increasing supply, taking pressure off this market that continues to make it difficult for many young families to become first-time homebuyers because of cost and a lack of supply among other challenges. Supporting pro-growth economic policies that incentivize investment in human capital, that improve educational and job training opportunities so that our communities continue to attract businesses, are essential to homeownership, intergenerational wealth building, and ultimately improving the lives of Hispanic Americans.  

We have a shortage of homes in America, with some estimates at nearly 4 million units or more, which is a staggering amount. The supply-demand imbalance has led to a shortage of affordable housing across the country, a crisis that has a direct impact on the Hispanic American community.  

Reducing the local regulatory barriers such as land use and zoning restrictions that inhibit supply and drive up costs disproportionately on first-time homebuyers – a great proportion of whom are Hispanic – will be critical to improving homeownership opportunities for Latinos. The high cost of regulation at the local level that limits supply and contributes to robust home price appreciation prohibits many young prospective Hispanic homebuyers from entering the market altogether. That situation has been made worse recently by historically high inflation that has eroded purchasing power, and additionally by rising interest rates needed to combat inflation. Hispanic first-time homebuyers will be one of the largest beneficiaries of policymakers wresting control of both inflation and rising interest rates.  

Reaching out directly to communities of color, moreover, to ensure all potential home borrowers in a lender’s market are served is part of their obligation. That includes ensuring low- to moderate-income families understand the importance of homeownership, providing tools to achieve it, and offering mortgage products that work for them.  

Market innovations and technological advancement throughout the housing ecosystem will also be essential moving forward. This includes use of technology to reach prospective borrowers through social media and online. It includes IT infrastructure that supports the digital age, something we began at FHA because we knew efficiency and access are often one and the same in this day and time. 

Other emerging technologies, such as artificial intelligence and machine learning, are making it possible to qualify borrowers who might not have traditional credit histories. We can’t discount the importance of both increasing opportunity on the financing side and reducing barriers on the regulatory side. That includes improving access to single-family detached homes but also condominiums which can often be a gateway to the housing market for first-time homebuyers, and which are also important for seniors. FHA recently updated their condo rules to make it easier for condo buyers to obtain FHA insurance.  

We also need to focus on the innovation in building affordable homes, utilizing every tool available to increase supply. This includes manufactured housing, modular homes, and new, efficient methods of building more traditional site-built homes. We’re seeing significant efforts to drive down costs of building homes which will go a long way toward meeting the enormous inventory challenges and helping to alleviate the torrid home price appreciation witnessed in recent years. Hispanic Americans will succeed if, in part, we innovate our way out of our current challenges.