Hispanic homeownership took a beating during the Great Recession, and it’s been slow to rebound.
Between 2007 and 2015, nearly one in five housing foreclosures in the US occurred in predominantly Hispanic communities, according to an April 2019 report from Zillow. And July 2019 Census data shows that the US Hispanic homeownership rate has yet to regain the 50.1% peak it reached in 2007.
But it’s no secret that this demographic has become a mainstay of the housing market. Hispanics accounted for 62.7% of net homeownership gains in the past decade, according to a May 2019 blog post by Freddie Mac. And this cohort sees the long-term payoff in homeownership; 88% of respondents agreed that owning a home is the best investment plan.
“Hispanics consistently indicate aspirational goals toward homeownership,” said David Acosta, 2019 president of the National Association of Hispanic Real Estate Professionals (NAHREP). “At a median age of 29, Hispanics are younger than the overall median US age and are [coming] into their prime home-buying years. With time, opportunity and information, more Hispanics will seek out homeownership as a key opportunity for improving their overall quality of life.”
These optimistic sentiments are rooted in the desire to achieve the American Dream, but Hispanic net worth remains below the national average, in part due to historically inherited wealth.
“Intergenerational wealth transfer plays a large part in increasing household wealth, and while Hispanics have less inherited wealth overall than non-Hispanic white households, this too is changing,” Acosta said, adding that “the appetite and enthusiasm for homeownership remains strong.”
For US Hispanics, the outsized presence of multigenerational households influences their approach to homeownership.
“Hispanics are more likely than non-Hispanics to live in multigenerational households or to otherwise experience homeownership as part of an extended family,” Acosta said. “Culturally, this factor means that saving for a down payment can be a family affair, which means multiple adults in a household contribute to the household expenses.”
Much of Hispanics’ home buying is taking place in the suburbs. A 2011 Brookings Institution report by demographer William Frey (on “Melting Pot Cities and Suburbs”) created a stir when it cited Census data showing 59% of Hispanics in large metro areas living in suburbs. By now, it should be common knowledge that Hispanics are a largely suburban group. Looking at trends in metro areas with at least 1 million residents, a September 2018 report on the New Geography website said just 17.4% of Hispanics lived in the “urban core.”
This home buying—while not specific to place—is a large marketing opportunity, if approached correctly.
“Marketing engagement of companies targeting Hispanic home buyers continues to be an area of opportunity ... because the content tends to lack cultural context,” Acosta said. “Marketers often mistake Spanish language proficiency for preference—spending resources on a Spanish-language strategy instead of on a market-specific, segmented Hispanic engagement strategy. Companies that address consumers in-culture, as opposed to defaulting to in-language, will win with Hispanic home buyers.”
Knowing this, it’s important for marketers to take a culturally appropriate approach to reaching Hispanic consumers. If they don’t, companies could lose out on a large and ever-growing cohort of Americans who are ready and able to spend.
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