Urban Wire What Will It Take to Help Latina Moms Hold onto Homeownership Gains?
Janneke Ratcliffe, Caitlin Young
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A neighborhood at night time.

Over the past 40 years, Latino households have made significant strides in achieving the stabilizing and wealth-building benefits of homeownership. After losing 44 percent of their wealth to the foreclosure crisis, Hispanic families began leading the housing market recovery in 2014, and their homeownership rate has risen steadily since.

Note: To align with referenced research and data sources, we use “Hispanic, “Latino,” and “Latina” in this post to refer to households and people who identify themselves as such. The US Census Bureau defines Hispanic or Latino as a person of Cuban, Mexican, Puerto Rican, South or Central American, or another Hispanic, Latino ,or Spanish origin. We acknowledge these may not be the preferred identifiers for all and remain committed to employing inclusive language whenever possible.

Based on long-term demographic forces, we predict a net total increase of 4.8 million Hispanic homeowner households between 2020 and 2040. And in its 2021 State of Hispanic Homeownership report, the National Association of Hispanic Real Estate Professionals (NAHREP) reported 1.9 million new Latino homeowners since 2014.

An emerging force behind this trend is the remarkable growth in homeowner households headed by Latina women. Although homeownership among all households headed by women increased over the past 40 years, households headed by married Latina women with children saw the largest jump from 1990 to 2019. The homeownership rate for these households climbed 25 percentage points, from 33 percent in 1990 to 58 percent in 2019, and is now almost on par with that of households headed by married Latino men (61 percent).

And even though households headed by single Latina women with children still have one of the lowest homeownership rates among the groups illustrated below (21 percent), they’ve made significant progress since 1990 (8 percent).

Line graph showing how household homeownership rates changed from 1990 to 2019 by marital status, gender identity, race and ethnicity, and presence of children in the household

But these positive improvements are not guaranteed to continue. Latino households led by women face barriers in the housing market based on their race, gender, culture, and location. What solutions could policymakers and mortgage lenders implement to ensure households headed by Latina women have equitable access to homeownership and its benefits?

Homeownership trends reflect the growing economic strength of households headed by Latina women

From 1990 to 2019, the overall homeownership rate for households headed by Latina women climbed from 30 percent to 45 percent. This change reflects an increase in the share of all households identifying as female headed and the share of those households owning their own homes.

In 1990, 31 percent of Latino households reported being headed by women. By 2019, that figure was 49 percent, nearly identical to the rates for white households (30 percent in 1990 and 49 percent in 2019). These trends convey the increased economic strength of households headed by Latina women. Between 1990 and 2019, these households increased their earnings and educational attainment: 40 percent reported earning $50,000 or more in 2019, compared with 26 percent in 1990; 43 percent reported attending at least some college in 2019, compared with 28 percent in 1990.

Households headed by Latina women are among the most likely to have children: 72 percent of households headed by married Latina women and 51 percent of households headed by single Latina women have children.

Nearly a third (8.3 million) of Latinos of any gender identity ages 45 and younger are mortgage ready today—almost the same share as among young white households—compared with less than a quarter in 2015.

This is good news for home sales. As aging white households decline in homeownership numbers and rates, Latino households, who are younger on average, will be forming households, starting families, and entering prime homebuying years.

These remarkable strides could portend increased housing stability and wealth for Latino families now and for future generations.

Latino households still face substantial barriers to homeownership

Demographics do not ensure destiny. Latino households, whose members are more likely to work in service jobs or be self-employed, experienced greater economic precarity, exposure risk, and higher rates of job and wage loss during the COVID-19 pandemic.

The pandemic also disproportionately affected women, who experienced greater unemployment and caregiving burdens. Given these combined factors, many Latina women with children faced overlapping threats to their economic outlook.

On top of that, the affordable housing supply crisis is boxing many Latino families out of homeownership. Latino households, regardless of family structure, are more likely to live in high-cost markets and areas experiencing the most severe supply challenges and strongest competition from institutional investors. Meanwhile, the longer homeownership is deferred, the more rising rents make it harder to save for a down payment.

And long-standing structural barriers remain in place for many Latino households. Almost 1 in 5 (18.5 percent) Hispanic applicants for home purchase mortgages were denied in 2020, compared with 10.5 percent of white applicants. Among Latina women who applied for purchase mortgages, the denial rate was 20.4 percent.

Research shows that Latino Federal Housing Administration applicants are less likely to receive a loan, even when controlling for default risk, and that they have similar or lower default rates after accounting for expected risk.

In addition to citizenship requirements and language and cultural barriers, the way lenders assess the “3 C’s” of mortgage qualification—credit, collateral, and capacity—are rooted in a legacy of systemic racism that disproportionately disadvantages Latino borrowers.

The Consumer Financial Protection Bureau found Hispanic consumers were significantly more likely to be “credit invisible” than white households, with the highest gap among people ages 25 to 34—prime first-time homebuying ages.

Younger Latino renters are also less likely to have intergenerational wealth to draw on for down payments. The median parental wealth of Latino young adults ages 18 to 34 is just $34,980, compared with $215,000 for their white counterparts.

And Latino households are also more likely to have income sources the current system is not well positioned to accommodate, such as self-employment earnings and multiearner households.

How can policymakers ensure continued growth in Latino homeownership rates?

In its report, NAHREP identifies concerted policy solutions that could increase the supply of affordable homes and the financing potential Latino homeowners need to acquire those homes. Immigration policy, zoning reform, and subsidies are all parts of a larger puzzle that could be considered in a nationwide, comprehensive strategy to create more affordable housing.

On the demand side, mortgage lending credit conditions remain historically tight, creating a key opportunity to revisit how the mortgage underwriting process can be tailored to accommodate mortgage-ready Latino households.

To address the lack of intergenerational wealth, expanding down payment assistance to serve first-generation homebuyers could create more than a million new Latino homeowners. And the households led by women with children who were most adversely affected by the pandemic could benefit from special design and targeting of housing assistance programs like eviction and foreclosure prevention measures, homebuyer preparation efforts, and matched savings for down payments. But a broader set of supports around employment, child care, education, and more could further promote women’s economic growth, including homeownership.

If the housing system commits to policies designed with Latino homebuyers—including Latina women—in mind, these households are poised to carry the American dream of homeownership into the future.

Research Areas Housing finance
Tags Credit availability Economic well-being Family and household data Financial knowledge and capability Financial products and services Financial stability Homeownership Latinx communities Racial barriers to housing Racial and ethnic disparities Race, gender, class, and ethnicity Racial homeownership gap
Policy Centers Housing Finance Policy Center
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