After a long day of work, Jesus Moreno and Dayra Medrano come home to the house they recently bought in the Terrell area to relax and enjoy the evening with their six-month-old baby.
“You feel proud and have a great sense of peace when we get home,” said Medrano, a pricing coordinator at Oak Farms Dallas.
The couple are part of the phenomenon that is changing the face of the real estate market in Texas.
According to the Urban Institute, Latinos will represent over 70% of the residential real estate purchasing power in the U.S. in the next 20 years. This means that 4.8 million new homeowners will come from the Latino community.
Diana Sifuentes, a real estate agent with more than two decades of experience in North Texas and a member of the National Association of Hispanic Real Estate Professionals, said that for Latinos, buying a home is the epitome of fulfilling the American Dream.
“Latinos who come to this country work very hard, and they are not satisfied with just having a job but are always thinking about having their own business and their own home,” said Sifuentes, who also serves as the regional co-chair for the National Association of Hispanic Real Estate Professionals Mountain Region.
According to a National Association of Realtors report, Latinos are making the most significant homeownership gains (19.8%) in Dallas compared with other ethnicities.
Despite a real estate market bogged down with high interest rates and limited inventory, the report found Latinos grew their homeownership rate more than any other racial or ethnic group in 2022.
The results show that Asians and Hispanics had the most significant gains in homeownership rates from 2012 to 2022, while Black Americans had the smallest. According to the report:
- 63% of Asian Americans owned a home in 2022, compared with 57% in 2012.
- Hispanics’ share hit a record 51% in 2022, up from slightly more than 45% in 2012.
- Black Americans’ rate rose from 42.5% in 2012 to 44% in 2022.
NAHRP 2024 State of the Hispanic Wealth Report says that achieving a 50% homeownership rate is a critical milestone for the Latino community. The Hispanic homeownership rate has never in the nation’s history reached 50%.
According to the U.S. Census Bureau 2023 report, with a median age of 30.7, Latinos are the youngest homeowner ethnic group. Sifuentes said that is one main reason why they have become a vital part of the real estate market.
One of the most promising aspects of the Hispanic community’s economic potential is its relative youth. Hispanics are young and, therefore, have ample time to grow their assets, develop businesses, and advance their earning potential.
Additionally, trends suggest that Hispanics are investing in real estate at younger ages than their non-Hispanic counterparts, providing an even longer runway for growth.
According to Home Mortgage Disclosure Act (HDMA) data, 44.8% of Latinos who purchased a primary residence with a mortgage in 2023 were under the age of 35, compared with 39.9% of non-Hispanic buyers.
Hispanic buyers also tend to be younger when buying investment properties. Last year, 14.6% of Latinos who financed an investment property or second home were under the age of 35, compared with 12.9% of non-Hispanic buyers.
“Latinos want to have that place where they come to relax after a long day of work and which they feel proud to own,” Sifuentes said.
Innovative financial tools
Financial programs created to help underserved communities have boosted home buying among the Hispanic community.
One of those financial tools is Wells Fargo’s Homebuyer Access grant, which provides up to $10,000 to borrowers as a down payment on their homes.
In addition, Wells Fargo offers another program that grants up to $5,000 toward closing costs for borrowers with incomes at or below 80% of the area median income where the property is located.
“These programs are designed to help middle-class and low-income families buy their first home,” said Valeria Esparza-Chávez, national Hispanic segment leader for Wells Fargo Home Lending.
Some misconceptions surrounding the Hispanic community have hindered its presence as a force within the real estate market, such as Hispanics predominantly purchase real estate in low- to moderate-income neighborhoods.
The majority (71%) of real estate purchases financed by Hispanic borrowers in 2023 were made in middle- and upper-income census tracts. Only 4% of Hispanic purchase originations last year were made in low-income census tracts.
Other myths that can create a barrier for Hispanics is believing that buying a house is complicated and requires a lot of money.
“The myth of the down payment is one of the most harmful,” Sifuentes said.
The real estate agent explained that many people believe it is necessary to have 20% of the cost of the property on hand for a down payment to qualify for a mortgage loan.
Sifuentes said that there are down payment programs that are as low as 3%.
“When a person puts down a considerable amount of money, they can access a slightly lower interest rate, but the reality is that you can buy a house with a lower down payment,” Sifuentes said.
Another myth is that without established credit, it is almost impossible to access a mortgage loan.
In this regard, Sifuentes explained that there are mortgage loans that do not necessarily rate applicants based on their credit score. Their consideration is instead based on what is known in the real estate market as “alternative credit.”
Sifuentes explained that alternative credit refers to the applicant’s payment history for rent and essential utilities, such as electricity, water, telephone and internet.
“Many Latinos do not like to have debts, so they do not build an established credit history, and they think that this will prevent them from buying a house, and in some cases, it is not like that,” said Sifuentes.
Peace of mind
Moreno and Medrano bought their house in April with the help of the Wells Fargo program that provided them with $10,000 to use as a down payment.
They met in high school and have shared their lives ever since.
With a baby on the way, the couple decided it wouldn’t be a good idea to continue living at Medrano’s mother, so they set out to find their own home.
“As soon as I walked into this house, I said, ‘this is it,’” she said.
The new, one-story home has 1,660 square feet, three bedrooms and two bathrooms.
The spacious living room with a wood floor has a colorful interactive game pad for their daughter.
Moreno, a construction worker, plans to use his professional skills to install a grill and barbecue in their backyard.
A kitchen equipped with a refrigerator, microwave, a spacious pantry, and enough drawers and built-in cabinets to accommodate electrical appliances, dishes, and silverware-completes the home of this couple, who have managed to fulfil their dream of owning their own home thanks to hard work and a lot of effort.
“You have to work hard, but it’s worth it,” said Moreno.
“Nothing is more important to me than giving my family a home where they feel happy and safe.”