Latino families expected to pull biggest gains in U.S. homeownership over next two decades

NASHVILLE, Tenn. — When Nashville-area real estate agent Janet Abeja sells a house, she knows those who will most benefit from the sale aren't the ones footing the down payment. Often, it's the youngest in the room. 

"Now this child's going to have stability," Abeja said. "The child is just going to have a better future because of it." 

As a first-generation homeowner and child of Latino immigrants, Abeja understands the long-term significance of purchasing a house. 

"It marks generational wealth for the Hispanic community for years to come because of the opportunities of homeownership," she said. "... That's what I feel it's done for me." 

While only two out of five Latino households in Nashville own a home, trends suggest that rate is on the rise. 

The biggest gains in overall U.S. homeownership over the next two decades are expected to come from new Latino homeowners, according to research from the Urban Institute, a nonprofit research organization. 

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Latino households have gained a significant amount of wealth across the country since 2016, after that measurement hit its lowest level since 1989. The improvement is driven largely by increased housing and homeownership, as it's where three-quarters of Latino families' hold their wealth. 

Home equity, or the difference between the value of a home and the mortgage still owed, is the single largest contributor to household wealth across the U.S., according to the Pew Research Center.

Across the country, the average Latino household has less than half the wealth of the typical white household. 

"The larger [wealth] gap in Nashville has a lot to do with the difference between the homeownership rates between Latinx and white households," said Nicole Bachaud, an economic analyst with Zillow. 

Because the typical age of a Latino person in the U.S. is younger than their white counterparts and younger Americans in general have lower homeownership rates, Latino homeownership figures are deflated. 

The median age of the Latino population in the U.S. is 29.8. So one in three are in their prime house buying years, according to the National Association of Hispanic Realtor Professionals 2020 Wealth Report. 

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Overcoming barriers to homeownership

Latinos are the fastest growing population in Nashville, growing 60% in the last decade, from 61,000 to 98,000, according to 2020 Census data. 

Like any ethnic or racial community, there is great diversity among Latinos socioeconomic status. So while some in Nashville are financially growing their wealth by homeownership, others are still struggling, said Martha Silva, interim co-executive director of Conexión Américas. 

"I think it's important to clarify, when we're talking about high rates of success, or opportunity, who we are exactly talking about, because it's not all Latinos, or all immigrants," Silva said.

The local nonprofit has helped Latinos in Middle Tennessee access loan products for mortgages for 15 years through their financial assistance program, Puertas Abiertas. 

The program's inception came after the nonprofit saw a lack of available loan products for immigrant families with individual taxpayer identification numbers.

An ITIN is a number issued by the U.S. Internal Revenue Service to people who are required for federal tax purposes to have a taxpayer ID number, but don't have and aren't eligible for a social security number, or they're unauthorized to work. 

So while Silva sees the increasing rate of homeownership as a positive, she stressed that the statistic can exclude the experience of many of the Latino families she works with.

"It might be growing in the Latinxs that are more integrated or more documented," Silva said. "I would say, they have the ability to earn more stable income."

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For nearly the last decade that Abeja has worked to help families purchase homes, she feels the Latino buying power is not only misunderstood, but undervalued. 

"It was disturbing in a way, where I thought there's so much potential here, but there's such a lack of education and a lack of guidance," she said. 

As a Spanish-speaking realtor, she wants to bridge the learning gap between the Hispanic community and the general market, she said. That includes accustoming realtors and loan officers to Latino cultural traditions that may differentiate some financial profiles from others. 

For example, in some Latino cultures it is traditional that elderly parents move in with their married children. But when it comes time to apply for a loan on a house, the financial histories of other adults who also live there can affect the applicant's success, Abeja said.

She advertises helping buyers find homes that are conducive for multigenerational families, with extra bedrooms and space. Because to her, homeownership is an important step for for advancing overall Latino wealth. 

"I learned to do this so that I could teach my mother she could be in a better place, and so I could teach my child," Abeja said. "It'll change the generations to come."

Follow Arcelia Martin on Twitter: @arcelitamartin.