Real Estate

Latino Wealth Gains Largely Driven By Real Estate Investments: NAHREP

Property values make up 52 percent of Latino household assets, as a result of both Latino primary homeownership and investment property assets.

Latinos have made historic levels of real estate and home equity gains in recent years, putting the demographic on track to hit the Hispanic Wealth Project (HWP) goal of achieving a 50 percent homeownership rate over the next five years, according to the National Association of Hispanic Real Estate Professionals’ (NAHREP) State of Hispanic Wealth Report (SHWR).

Currently, Latinos have a homeownership rate of more than 48 percent. The demographic’s median household wealth also made great strides from 2013 to 2019, increasing from $15,150 to $36,050.

Property values make up 52 percent of Latino household assets, as a result of both Latino primary homeownership and investment property assets.

Gary Acosta

“Latinos continue to lead entrepreneurial starts, labor force participation, and homeownership growth, outpacing that of other segments of the population,” Gary Acosta, NAHREP’s CEO and co-founder, said in a statement.

Latinos drove investment property ownership rates between 2016 and 2019, increasing their ownership of investment properties by 33.1 percent, the greatest proportion of any demographic. Meanwhile, non-Hispanic investment property ownership rates declined during the same period.

Within the next five years, 36 percent of Latinos anticipate buying an investment property, according to the 2021 HWP Survey. This year alone, the number of Latinos seeking to buy an investment property was almost three times as many non-Hispanic white buyers seeking to buy an investment property.

Among Latino renters, not being able to save up enough money for a down payment is the biggest barrier to homeownership. “Surveys suggest that inaccuracies exist in perceptions on how much of a down payment is needed to buy a home, particularly among Latinos,” NAHREP’s report noted.

Despite gains in homeownership, household wealth, and other real estate assets, Latinos still struggle with savings and investments overall. The demographic decreased their retirement contributions by 14.1 percent between 2016 and 2019, remaining the group with the lowest retirement account participation rate across the U.S.

Limited understanding of how the stock market works has also contributed to low retirement account participation, with 25 percent of Latinos reporting not knowing how to invest in retirement accounts, 10 percent believing investing in retirement accounts is not safe, and 9 percent completely unaware of what retirement accounts are.

“Latinos have trailed all other demographics in retirement account participation, small business owners are not accessing capital at the rates necessary to effectively scale their businesses, inventory shortages are slowing home purchases, and Latinos were disproportionately impacted by the pandemic,” a statement released by NAHREP said. “However, even with the setbacks, Latino household wealth is set to continue on an upward trajectory, with wealth derived from real estate acquisitions offsetting some of the losses in business equity and savings and investments.”

Email Lillian Dickerson

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