The past decade has seen Hispanic households contribute significantly to homeownership growth in the United States. Data shows that Hispanics have been responsible for 25% of the overall increase in homeownership nationwide over the last 10 years. In 2023, the Hispanic homeownership rate reached 49.5%, a rise of 377,000 owner-households compared to the previous year. In total, more than 9.5 million Hispanic households now own homes.
A key demographic within this growth is the younger generation: 41.2% of Hispanic home purchase originations in 2023 were from individuals under 35 years old, despite the challenging economic environment of rising interest rates and high home prices. These data points provide the foundation for examining three specific trends in Hispanic homeownership that are shaping the future of the U.S. housing market and mortgage industry.
1. Multicultural Marketing and Its Role in Lead Generation
Lead generation and personalization are dominant trends in multicultural marketing, particularly for reaching Hispanic homebuyers. Research suggests that consumers, including Hispanics, are more likely to engage with businesses that create personalized experiences for them. This extends to the homebuying process, where the ability to access information in Spanish and receive recommendations from trusted social networks plays a significant role in choosing mortgage lenders.
In 2023, the top reasons Hispanic borrowers selected their mortgage lenders included Spanish-speaking or translation services (13%) and referrals from family, friends, or colleagues (25%) (Maxwell Hispanic Borrower Report). These insights underscore the importance of language and community in the decision-making process for Hispanic homebuyers. Considering the U.S. Hispanic population is projected to grow from 65 million today to over 86 million by 2045, mortgage originators would do well to invest in bilingual marketing efforts, including social media content, articles, and infographics, targeting both English- and Spanish-speaking audiences.
Financial barriers faced by Hispanic homebuyers largely mirror those faced by other demographics: 45% cite debt-to-income ratio as a challenge, 34.7% mention credit score issues, and 17% struggle with saving for a down payment. This suggests that marketing strategies tailored to addressing these specific challenges—particularly when delivered in Spanish—could yield better engagement and conversion rates within the Hispanic community.
Digital platforms are crucial for reaching Hispanic homebuyers. YouTube is the most-used social media platform by Hispanics, with an 86% usage rate, particularly within the 25-44 age bracket that overlaps with a significant portion of the homebuying demographic. Other platforms, like Facebook and Instagram, also play important roles, while TikTok is gaining momentum, especially with future homebuyers in Gen Z. Reddit, although used by only 23% of Hispanics, provides an avenue for mortgage professionals to share expertise in forums such as r/PersonalFinance, r/RealEstate, and r/FirstTimeHomeBuyer.
Strategic Insight: Mortgage originators should plan for longer engagement cycles with early journey Hispanic homebuyers who may be facing financial hurdles. Utilizing tools like FinLocker or KeySteps will provide prospective buyers with the guidance they need to improve their financial health well before they apply for a mortgage, facilitating better long-term lead nurturing.
2. Multigenerational Living and Shifts in Housing Preferences
Hispanic households are more likely than any other demographic to live in multigenerational homes. This influences both the type of home they seek and where they choose to buy. As property prices increased, many Hispanic buyers relocated from high-cost areas like California and Florida to more affordable regions such as Colorado, Texas, and the Carolinas. However, despite these affordability-driven migrations, 71% of Hispanic home purchases in 2023 occurred in middle- and upper-income census tracts. Key metro areas include Los Angeles, New York, Houston, and Miami, where Hispanic populations are large and real estate and job markets are strong. In contrast, only 4% of Hispanic purchase originations were in low-income census tracts.
Multigenerational living arrangements shape the ideal home configuration for many Hispanic buyers. Properties with features that accommodate extended family members—such as a ground-floor owner suite for grandparents, along with separate spaces for parents and children—are highly desirable. Accessory dwelling units (ADUs) are also popular, as they offer flexible living arrangements for multigenerational households or an opportunity for rental income.
Strategic Insight: The real estate and mortgage industries are highly relationship-driven, particularly for Hispanic homebuyers who frequently rely on recommendations from family and friends. Increasing the number of Hispanic professionals within these industries could enhance cultural and linguistic understanding, improving client engagement. Additionally, offering loan products that support multigenerational living—such as Fannie Mae and Freddie Mac options for multiple co-borrowers or ADU financing—would cater to this demographic’s specific needs.
3. Employment, Income Verification, and the Gig Economy
Hispanic homeownership is often motivated by the desire to build generational wealth, with 81% of respondents identifying this as a key factor (Maxwell). However, achieving homeownership often requires financial sacrifices. Nearly two-thirds (64%) of Hispanic homebuyers in 2023 needed to earn or save additional income for a down payment, and 43% reported taking on an extra job to do so. Some even moved in with family (11%) to save money.
The Hispanic community has a high rate of entrepreneurship, with Hispanic individuals being 1.7 times more likely than non-Hispanic counterparts to own a small business. This entrepreneurial spirit has contributed to wealth creation within the community—self-employed Hispanics tend to earn five times the income of their peers. However, business ownership can also complicate the homebuying process, especially when it comes to verifying income from multiple sources.
Mortgage lenders have improved their ability to calculate income from diverse sources, such as multiple jobs or 1099 income. Many now offer digital verification services, allowing applicants to securely log into payroll systems to streamline the income verification process. This is especially beneficial for Hispanic borrowers with a mix of W2 employment and independent contracting work.
The gig economy, which includes freelancers, contractors, and other non-traditional workers, is expanding rapidly. As of 2024, 16% of the U.S. workforce earns their primary income as freelancers, contractors or gig workers, while 17% rely on this type of work as a secondary income source. This highlights the growing need for mortgage products tailored to gig workers, who often face challenges qualifying for traditional loans due to high tax deductions or irregular income.
Strategic Insight: Mortgage originators must develop strategies for working with gig economy workers and small business owners, particularly by offering products that accept bank statements instead of W2s or tax returns. Educating these borrowers on alternative income verification methods will open up opportunities for homeownership that might otherwise be out of reach.
Hispanic homeownership is a dynamic and growing force in the U.S. housing market. The trends of multicultural marketing, multigenerational living, and evolving employment models are reshaping how lenders and real estate professionals must approach this demographic. As the Hispanic population continues to expand and play a larger role in the housing market, understanding and adapting to these trends will be essential for the long-term success of mortgage originators and real estate professionals alike. By leveraging data-driven insights and addressing the specific needs of Hispanic homebuyers, the industry can better serve the next generation of homebuyers.
Resources:
2023 Hispanic American Borrower Report, Maxwell
2022 State of Hispanic Homeownership Report, NAHREP
2023 State of Hispanic Wealth Report, NAHREP
More Americans Are Taking On Side Hustles In 2024, Including Self-Employed Gigs, CivicScience
