Homeownership and financial security are key to achieving the American Dream for Latines.  According to the Pew Research Center, 33% of Latines said homeownership is an extremely important life goal for them. Among those who felt they had achieved the American Dream, 26% attributed it to homeownership and financial stability. Of those who did not feel they had achieved the American Dream, 31% cited homeownership and financial stability.  

However, the notion of homeownership in the American Dream for Latines may play out differently than for other racial and ethnic groups. For example, whether out of necessity or culture, Latine households are larger and more multigenerational than their non-Latine counterparts. Because of this, many Latines may seek larger, more costly homes, but also may use multiple sources of income to pay for them.  

The Black Wealth Data Center’s Racial Wealth Equity Database datasets detail and reveal variations in homeownership rates, median income, and net worth among Latines overall, as well as among subsets of Latines. Using this data, this blog explores these differences and where possible, identifies any connections or opportunities for further investigation. 

Disparities in homeownership rates vary widely across and among racial and ethnic groups. Non-Hispanic White households have the highest homeownership rates, at 70%, compared to 49% for Hispanic households, 45% for Black families and 61% for Asian American Pacific Islander (AAPI) households. There are also significant variations within these groups. Latines of different origins and in different regions in the United States experience wide variations in homeownership rates.

Sustaining Homeownership as a Pathway to Wealth for Latine Communities  

Homeownership is a key component of wealth for many families; however, its ability to create and sustain wealth is influenced by many factors, including financing, length of ownership, and local market conditions. Homeownership can be, a vehicle for debt as well as building equity. Borrowers of color disproportionately access, and are targeted with less safe and secure loan products.  

Further adding to the disparities is that, on the journey to homeownership, Latines, similarly to African Americans, face greater challenges to accessing credit. For example, the Urban Institute found that young adults in predominantly Black and Hispanic communities often start their adulthood with lower average credit scores compared to their non-White counterparts in majority-white communities. This disparity is concerning, especially during the crucial years when individuals are looking to build home equity and establish a strong financial foundation for their future.   

Research since the Great Recession in 2008 has documented that Latine and Black mortgage applicants experience higher loan denial rates and, for those to whom lenders extend credit, pay slightly higher costs over the life of the loans. Credit denials worsen an applicant’s credit profile and higher loan costs can threaten the sustainability of homeownership, each impacting homeownership rates.  

In the same period, homeownership rates in the US have decreased by less than one percentage point. This decrease is driven largely by a decline in ownership among non-Hispanic White households, while Hispanic homeownership increased slightly by nearly the same amount.   

Nearly all Latine groups experienced improvements in homeownership rates in the years since the Great Recession. Notably, two of the largest groups, Mexican and Puerto Rican households, appear to drive the overall increases in Latine homeownership. Clemente Mujica, President of NPHS, Inc., a nonprofit housing provider serving the areas east of Los Angeles, noted, “(f)ollowing the economic downturn, our Latine communities have recovered and prospered, primarily through asset-building via homeownership. This resilience has allowed for substantial wealth accumulation, enhancing these communities' overall economic stability and prosperity.” 

Rising Challenges for Latine Homeownership  

But not all Latine groups have fared the same since the economic crisis. While Dominican homeownership increased by the most of any Latine subset (though from the lowest baseline, perhaps reflecting high-cost housing markets), followed by Mexicans and Puerto Ricans, Cubans experienced the largest decrease in homeownership, at nearly 5%, over the same period. where Cubans are highly concentrated and housing costs have escalated.

Homeownership alone does not indicate whether a household is economically stable.

Another challenge for future Latine homebuyers is interest rates. As a relatively young demographic, they will likely drive near- and long-term homeownership trends. High mortgage rates, at least as contrasted with those over the last two decades, will likely temper gains. 

These barriers are not just apparent in notoriously costly coastal markets. Raul Raymundo, CEO and Co-founder of the Resurrection Project in Chicago notes, “the challenge for Latines is that the affordability gap is getting wider. Today, the purchasing power is a lot less than the cost of a home, as a result, higher interest rates and inflation. This has made it more difficult for Latines to own a home and build wealth.”

Median household income is an imperfect predictor of homeownership outcomes as it can only suggest how different groups are faring. While non-Hispanic White families continue to have the highest median income of any racial or ethnic group, Hispanic income grew more quickly at 11.2% compared to 7.6% in the period of 2008-2019.

But while Cubans had the second highest income, following Colombians, they also saw the greatest decrease in homeownership, and among the smallest increases in median income within Latine groups.

Homeownership alone does not indicate whether a household is economically stable. Other indicators of economic well-being such as net worth, offer a more nuanced picture of wealth. Unfortunately, available data is not reliable enough to accurately explore groups beyond the broad demographic of those who identify as Mexican. In 2022, Median net worth for the United States was $166,900, with non-Hispanic White net worth at $250,400 compared to just $48,720 for Hispanics. Mexicans experience a slightly higher median income than their Latine peers at $62,760.  

Median assets are similarly skewed, with non-Hispanic White median assets at $376,200, compared to $106,900 for Hispanics overall and $116,400 for Mexicans.  Overall Hispanic and Mexican median debt are both $37,900, compared to non-Hispanic White debt at $77,800 and $63,300 for the nation overall. Since net worth is assets minus debt, it may be significant that Latine debt is relatively low compared to the nation overall and non-Hispanic White households. This may reflect Latine reluctance to take on debt. While debt skepticism can help stabilize household finances, safe debt is essential to growing businesses, purchasing homes, and, often, affording education. Latine homeownership, income, and wealth appear to be improving, particularly for some groups.  

Academics and practitioners need better data, fuller commitments to expanded research, and robust program evaluation to determine a fuller picture of Latine wealth. Such a strategy will help all of us understand which interventions are effective and worth pursuing. 

This blog is part of a series on Homeownership and the Racial Wealth Divide. Check out parts one and two of our series here:    

Despite “New” Great Migration, Little Increase in Black Homeownership Rates 

Disaggregating the Myth: AAPI Homeownership and Wealth 

¹ Prosperity Now uses the more gender-neutral Spanish language friendly term “Latine” to refer to people of Latino/a/x and Hispanic origin. The terms Hispanic and Latino are used interchangeably by Pew Research and others, though technically terminology has different meanings, one referring to language and the other geography.  Here we use Hispanic when source data does, and otherwise use Latine.