A recent graduate from Hunter College with a master’s degree in Music Education, 28-year-old Luis Zamora has set his sights on the next step in the American dream: buying a house.
Zamora was born and raised in New York City to blue-collar immigrants. He grew up in Harlem with his parents and younger sister in a leased three-bedroom apartment. Currently a teacher at a charter school on Long Island, Zamora is hoping to soon become a homeowner.
“I’ve been living in this apartment my whole life and I feel like I’ve outgrown it at this point. It doesn’t have the privacy that I want and I don’t want to keep paying rent, I want to have an actual property to my name,” said Zamora.
Homeownership is often associated with stability, comfort and independence. It also provides families with a safety net and a step toward building generational wealth.
But the American dream is historically out of reach for most Hispanic and Latino families.
According to the U.S. Census Bureau, in 2023, the national homeownership rate was 65.9%, in comparison, the Hispanic homeownership rate was 49.7%.
In addition, in the U.S., 52% of Hispanic and Latino households rent their homes in comparison to 28% of non-Hispanic white households.
The problems begin with the fact information available to prospective Hispanic homebuyers can sometimes be hard to obtain or difficult to understand due to language barriers and cultural differences.
“We have learned that we have to educate the consumer,” said Diana Sifuentes, franchise co-owner at Berkshire Hathaway HS A Action Realtors.
A lack of financial literacy among this demographic also puts them at a disadvantage. Many are unaware or might not qualify for loan services and down payment assistance programs.
The lack of legal status, a complicated and confusing system and the lack of trust of traditional financial institutions can also seclude potential homebuyers.
“Latinos are much more likely to have thin credit, or to be what we would call credit invisible, meaning they essentially have no credit,” said Elizabeth Nimmons, Senior Policy & Research Analyst at The National Association of Hispanic Real Estate Professionals (NAHREP).
In addition, in 2023, the housing market was hit with exorbitant interest rates.
“While rising interest rates affected all homebuyers, this impact was more pronounced among Hispanic households, many of whom are first time buyers with lower median incomes and who live in higher priced markets,” according to the NAHREP 2023 State of Hispanic Homeownership Report.
Research by the Urban Institute predicts a drop in the general homeownership rate through 2040 due to the slowing of the US population growth.
Despite this decline, homeownership among Latino households is projected to grow as this youthful demographic enters their prime home buying years.
According to the Urban Institute, “net growth in the number of homeowners from 2020 to 2040 will be entirely among people of color, especially Hispanic homeowners.”
More than two-thirds of the Hispanic population can be classified as Millenial or younger and 26% of children under the age of 18 are Hispanic, according to the Hispanic Homeownership Report.
As these young adults leave their own homes and begin to form their own households they will contribute to the growing rates of homeownership.
“60 year olds aren’t your general first time home buyers, either they already have a home and they’re not planning to move or they have not been able to buy a home and it’s unlikely that they’re able to do that at 60 years old,” said Nimmons.
In addition, real estate agents have been a key role player in the growing homeownership rates.
They help buyers during the mortgage process and explain the different types of loan options available such as FHA and ITIN loans.
In addition to providing resources and information to her clients, SiFuentes encourages her clients to view real estate as a way to build wealth.
She notes that homeownership has a positive impact on the mindset and behavior of families, leading to better opportunities and a sense of accomplishment.
Another contributing factor is that Latinos are willing to move to more affordable areas.
“I have a range of how much I’m willing to spend,” said Zamora. “I noticed that most likely if I buy it’s going to probably be in Long Island or Yonkers because the city it’s just very expensive. If I were to get something at that range, it wouldn’t be exactly what I’m looking for.”
When considering homeownership, it’s important to take into consideration all of the costs.
“You really want to understand how much home you can afford,” said David J. Reiss, clinical professor of Law at Cornell Law School. “New homeowners need to understand that even if they’re in a very good place now, they need to prepare and have emergency savings in case life’s challenges hit them and their family.”
Zamora regrets splurging on apparel and other pricey discretionary items. While he already has a real estate agent that a close friend recommended, before he begins looking at houses he wants to save enough for a down payment and pay off his student loans and car payment.
“My main goal is to clear those debts out and then just continue saving for the house and hopefully in a year or two I’ll be able to make a down payment for it,” said Zamora.
As education and advocacy in the community grows, generations forward will have an easier time achieving their dreams of homeownership.