Mary Chao
High interest rates push home buyers and sellers to the brink
With 30-year mortgage interest rates pushing 8%, buyers and sellers are frustrated with the market at a standstill.
LEARN MOREDespite prevailing headwinds facing homebuyers such as affordability and inventory, Hispanics are facing challenges head-on and continuing to pursue home ownership, said Gary Acosta, CEO and co-founder of the National Association of Hispanic Real Estate Professionals and co-founder of L’Attitude, a national business event that celebrates culture.
Hispanic homeownership rates have experienced steady growth over the past eight years, reaching 48.6%, according to research in the NAHREP State of Hispanic Ownership Report. In 2022, Latinos added 349,000 homeowner households, one of the largest single-year gains for Latinos in the past 10 years.
“It is the only ethnic demographic to have eight straight years of homeownership gains from a percentage standpoint,” Acosta said.
Acosta predicts that the Latino homeownership rate will continue to grow over the next 20 years and outpace the overall population. Homeownership is part of the American Dream for Latinos, Acosta said.
“If you understand Hispanic culture, you’ll understand that family is core to the Hispanic cultural experience. Our families are everything to us. Of course, the home is the central gathering place,” he said.
Hispanics will pool their money within multiple generations to buy a home, Acosta said, facing the challenges of the current market head-on.
According to the report, since 2014, when homeownership rates among Latinos began increasing following the Great Recession, 2.3 million new Hispanic homeowner households formed. As of 2022, there were 9.2 million Hispanic homeowner households.
Home price appreciation nationally reached a level of 20.1% as of April 2022. Over the last 10 years, home prices have more than doubled in the U.S.
Meanwhile, in early January of 2022, the average 30-year mortgage was 3.22%. As of Sept. 22, 2023, the average interest rate is 7.75% for people with good credit, according to Bankrate.com
The rapid rise in interest rates and rising prices created new barriers to affordability for all Americans, Acosta said.
Latinos are willing to move for affordable housing and for jobs, Acosta said. It’s not just California, New York and Florida cities. Latinos are moving to cities such as Nashville, Minneapolis and Des Moines, Iowa.
The median age for Latinos is 30, which is 8 years younger than the median age of the general population of Americans, and is a prime homebuying age according to Acosta.
According to Home Mortgage Disclosure Act data, more than 70% of Latinos who purchased a home with a mortgage in 2021 were under the age of 45, compared to 64% of the general population.
The combination of higher interest rates and rising home price appreciation made affordability for first-time buyers more difficult than at any time in recent history, Acosta said. Yet the resilience and persistence of Hispanic homebuyers continues to elevate ownership in America.
“The cornerstone of the American Dream for almost all immigrants, but especially Latino immigrants, is home ownership,” Acosta said.
