U.S. Mortgage Insurers: Hispanic Homeownership – How Hispanic Population Growth Helps Drive the Homeownership Market
According to the 2020
Hispanic population growth is also a significant reason to be focused on the barriers to homeownership for all minorities. Economic barriers and housing supply challenges for this population continue to keep homeownership out of reach for many of these potential homeowners. The income gap between Hispanics and non-Hispanic Whites remains steep, with non-Hispanic White households having a median income 26 percent higher than that of Hispanic households. In 2019, the median Hispanic household income was
USMI's 2021
Among the obstacles Hispanics face, 66 percent indicated that the lack of affordable homes is the biggest housing-related issue. Additionally, 20 percent said that one of the biggest challenges they face when buying a home is the inability to afford a 20 percent down payment, as monthly housing costs consume a large amount of Hispanics' income - nearly 60 percent said they spend 30+ percent of their monthly household income on housing. Lastly, 65 percent of Hispanics suggested there is socioeconomic bias in the homebuying process, with the survey finding that lower levels of income, lack of intergenerational wealth for down payments, and difficulties in the credit scoring system are the most significant barriers for increasing minority homeownership in the
However, while these barriers were cited, 90 percent of Hispanics also conveyed that they felt treated fairly during the mortgage process. Nonetheless, myths and misinformation persist around this demographic. By a nearly 3 to 1 ratio compared to White respondents, Hispanics believe the mortgage approval process is not affordable, and stated that they do not fully understand down payment requirements. In fact, 45 percent mistakenly believe a 20+ percent down payment is required, and another 21 percent report they do not know what amount of a down payment is required. In reality, private mortgage insurance (MI) enables homebuyers to purchase homes with down payments as low as 3 percent.
These figures and projections make very clear that as the Hispanic population rapidly grows and has a significant impact on the housing market, policymakers must not lose sight of addressing both near term market challenges, such as the significant lack of affordable homes for purchase or rent, as well as longer-term systemic issues that unnecessarily increase costs or create barriers for minority and lower income homebuyers. Notably, despite having been acutely impacted by the COVID-19 pandemic, Hispanic Americans are the only demographic group to have increased their homeownership rate for six consecutive years (including 2020) according to NAHREP. Removing barriers to minority homeownership will enable even more Hispanic households to benefit from sustainable homeownership in the decades to come.
Private MI enhances the ability of minority and lower income homebuyers to borrow in an affordable and sustainable way, enabling them to achieve housing stability and build wealth--and realize the American Dream. In 2020, nearly 60 percent of borrowers served by private MI were first-time homebuyers and more than 40 percent were borrowers with incomes below
As we celebrate Hispanic Heritage Month, we are committed to supporting sound and prudent policies that help expand homeownership.
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REPORT: https://nahrep.org/downloads/2020-state-of-hispanic-homeownership-report.pdf
REPORT: https://www.census.gov/content/dam/Census/library/publications/2020/demo/p25-1144.pdf
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