A Research Agenda to Advance Latino Homeownership

Latinos represent one of the fastest demographic groups in the United States, yet their housing needs remain understudied. A crucial area for future research is understanding how the heterogeneity of the U.S. Latino community affects homebuying patterns. Photo credit: iStock.com/Feverpitched

The Latino community represents one of the fastest-growing demographic groups in the United States, and by 2040, Latinos are expected to make up 70 percent of new U.S. homeowners. However, researchers have conducted few studies of the multifaceted housing needs of U.S. Latinos that reflect the diversity of this population. To address issues of housing equity, particularly disparities in homeownership, UnidosUS created the Home Ownership Means Equity (HOME) initiative and partnered with the Urban Institute to develop and answer important research questions that will ensure that HOME meets its goal of increasing homeownership rates among U.S. Latinos. In July 2023, the Urban Institute released “Priorities for Advancing Latino Homeownership,” a report that examines the state of existing research on Latino homeownership and outlines an agenda to fill research gaps and build the knowledge base needed for well-tailored, research-driven policy solutions. Urban Institute researchers found that housing wealth among Latino households overall was disproportionately less than that of white homeowners, because of their lower homeownership rates and the lower values of their homes. The proposed research agenda aims to inform policy decisions intended to reduce these disparities.

Identifying Challenges to Greater Homeownership

The research agenda highlights several issues that current research has not adequately explored. For example, although significant research examines the role that historic housing discrimination policies, such as redlining, have played in present-day homeownership inequities, little of that research has focused specifically on how those polices affected Latino communities. The report also calls for additional research into the ways in which systemic issues affect Latinos differently from other demographic groups. For example, a lack of diversity in the real estate industry, including agents and mortgage brokers, may hinder growth in Latino homeownership rates. More research is also needed into the effects of macroeconomic conditions, housing supply, or political conditions on prospective U.S. Latino homebuyers.

Although language barriers can also present a challenge to homebuying and obtaining mortgages, even fluent English is not a guarantee of success in this complex process. The report points out that many Latino homebuyers who are fluent in English may also be the first in their families to become U.S. homebuyers and therefore lack access to advice and insights from family members who have already completed the process. Previous research examining whether a homeownership counseling program offered to residents of Denver Housing Authority properties improved homeownership outcomes found that program participants were more likely than nonparticipants to hold 30-year mortgages, have mortgages with lower interest rates, live in neighborhoods with few vacant homes or homes in disrepair; own homes with higher values and for longer periods, and avoid foreclosure and short sales.

Unpacking the Needs of a Diverse Demographic

The report stated that a crucial area for future research is understanding how the heterogeneity of the U.S. Latino community affects homebuying patterns. Over the decades, the origin counties countries of U.S Latino immigrants have shifted, and the political and economic conditions of migrants' home countries influence the characteristics of who moves and where in the United States they settle. These factors have led to a variety of experiences for different Latino groups, underscoring the importance of research that disaggregates data and avoids solutions that may not apply to all groups. In unincorporated communities along the U.S.-Mexico border, known as "colonias," the use of informal construction methods may require homeownership lending program to take that reality into account to achieve homeownership goals.

The Future Drivers of Homebuying in the United States

The relative youth and strong growth rate of the U.S. Latino population positions this cohort to be a powerful driver of homebuying in the coming decades, according to earlier research. Understanding homebuying trends among different demographic cohorts within the Latino community will be important as generational turnover inevitably proceeds, and research that focuses only on aggregate trends without considering the particular diversity of the U.S. Latino population will miss these dynamics.

See PD&R’s Cityscape Volume 23, Number 2 and Number 3 (2021) for more on the Latino housing experience in the United States.