However, with rising interest rates and escalating home prices, affordability issues are appearing for young Hispanic homebuyers.
Hispanic homebuyers are younger than their counterparts
In honor of Hispanic Heritage month, CoreLogic took a deeper look at Hispanic homebuyer statistics, finding that first time Hispanic homebuyers are often younger than their non-Hispanic counterparts. In 2022, around 40% were under the age of 35. Comparatively, 36% of non-Hispanic homebuyers were under the age of 35. Additionally, 33% of Hispanic homebuyers were even younger, aged between 25 and 34, only 31% of their non-Hispanic counterparts fell into the same age group.
Due to their young ages, Hispanic homebuyers are more likely to have limited savings and are often first-time homebuyers.
Continual increase in home loans to majority-Hispanic areas
Using data from the Home Mortgage Disclosure Act (HMDA), CoreLogic has observed increase in home loans for areas where the population is 50% Hispanic or more.
Those loans rose 6.6% in 2022 and 6.8% in 2023. Also in 2022, the home purchase loan for Hispanic-White borrowers was 9.1%.
Majority-Hispanic areas have more FHA loans and more loan troubles
In low-income and high-minority areas, both FHA insured loans and conventional loans saw a slight increase in 2023. Conventional loans raised by 6% while FHA loans raised 12%.
Additionally, CoreLogic finds that denial rates are higher for Hispanic loans in majority Hispanic areas. Despite the increase in loans, however, the overall denial rate for Hispanic borrowers was 13%. Meanwhile, the denial rate for non-Hispanic borrowers was just 9%.
According to HMDA data, the primary reason for denying mortgage application is debt-to-income ratio: Hispanic borrowers’ have three percentage points higher than their non-Hispanic counterparts.
Expected increase in Hispanic homebuyer loans
In spite of loan challenges, though, CoreLogic anticipates that the number of loans given to Hispanic borrowers will increase, as the majority of the Hispanic population reaches the average age of American first-homebuyers: 36.