Hispanic Heritage Month is a great time to reflect on the contributions and achievements of Hispanic Americans and to celebrate the culture and heritage of people of Hispanic or Latino descent. It is also an opportunity to acknowledge the important and growing role the Hispanic community plays in Virginia’s home-buying market.
Hispanic Homeownership Rates Have Risen But Are Still Far Lower Than White Homeownership Rates
In 2000, about 44% of Hispanic households in Virginia were homeowners. Homeownership rates increased significantly during the mid-2000s, but Hispanic and Latino homeowners were hard hit by the housing market crash in 2007 and 2008. Since the Great Recession, homeownership rates among Virginia’s Hispanic population have been increasing steadily, and the Hispanic homeownership rate hit 50% in 2018 and 2019. (Homeownership rate data for 2020 are not yet available.)
Homeownership among Hispanic households has accelerated, while growth in homeownership rates among African Americans in Virginia have stagnated. Despite rising rates, Hispanic households are still much less likely that White households to own a home in Virginia.
In 2019, the White homeownership rate was 74% in Virginia, while the Hispanic homeownership rate was 50%, meaning there was a 24 percentage point Hispanic-White homeownership rate gap. The Hispanic-White homeownership gap has declined over the past two decades, but still reflects a wide disparity in access to homeownership in the commonwealth.
There is a Wide Hispanic-White Homeownership Gap in Many Localities in Virginia
In most counties and independent cities in Virginia, there is a significant Hispanic-White homeownership gap. Some of the biggest gaps in homeownership rates are in central Virginia, including in some of the suburbs of Richmond and Charlottesville.
There are smaller differences in homeownership rates in some of Virginia’s rural communities, including some areas in southern and southwestern Virginia, as well as some parts of the state’s Northern Neck region.
The Hispanic Population Will be a Major Driver of the Housing Market Over the Next Two Decades
Hispanic households account for just 5% of Virginia’s homeowners. However, about one out of ten residents in Virginia—10% of the population—is Hispanic. The Hispanic population has grown much more quickly than either the White or African American population over the past four decades. Looking ahead, over the next three decades, the Hispanic population in Virginia is expected to nearly double, from about 850,000 in 2020 to nearly 1.7 million in 2050.
Virginia’s Hispanic population will increasingly be a driver of homeownership demand in the state:
- A recent study estimates that Hispanic or Latino homebuyers will account for 70% of homeownership growth nationally between 2020 and 2040.
- The Hispanic population is projected to be the only racial or ethnic group in the U.S. that will experience an increase in homeownership rates over the next two decades.
- Overall incomes for Hispanic residents are growing faster than for any other racial or ethnic group, and their purchasing power is on the rise.
Despite the positive outlook for Hispanic homeownership, this group of prospective homebuyers often faces challenges:
- Hispanic households have a harder time getting approved for a home mortgage than do White households.
- When Hispanic households do secure a home mortgage, they tend to pay higher rates and higher closing costs than White households.
- A recent survey by the U.S. Mortgage Insurers reports that 65% of Hispanics say there is socioeconomic bias in the home-buying process.
Facilitating Hispanic homeownership is important for supporting the economic well-being and wealth creation opportunities for the hundreds of thousands of Hispanic Virginians. Tapping into this growing market is also an important way for REALTORS® in Virginia to build their businesses and grow their networks.
For more information on Hispanic homeownership, and to build partnerships with Hispanic real estate professionals, the National Association of Hispanic Real Estate Professionals is a great resource.
Click here to send any comments or questions about this piece to Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.