As a Hispanic real estate professional, I take pride in staying up-to-date on trends that impact our community, especially when it comes to homeownership and wealth-building. The recently released 2024 State of Hispanic Wealth Report from the Hispanic Wealth Project (HWP) and the National Association of Hispanic Real Estate Professionals (NAHREP) provides valuable insights into the progress, challenges, and opportunities that lie ahead for Hispanic households. Here’s a breakdown of the key takeaways and what they mean for our community’s future.
The Power of Homeownership
Homeownership has long been a cornerstone of wealth-building, and this rings especially true within the Hispanic community. According to the report, the Hispanic homeownership rate hit 49.5% in 2023, edging closer to HWP’s goal of maintaining a 50% rate. This progress is remarkable, especially when you consider the rising home prices and mortgage rates that have been barriers for many.
HWP’s target is to increase Hispanic homeowner households to 11.5 million and to boost investment property ownership by 25%. Why? Because owning property is one of the most effective ways to build and transfer wealth. Not only do Hispanic homeowners have a significantly higher net worth than renters, but younger generations of Hispanics are also diving into both home and investment property markets earlier than their non-Hispanic counterparts.
I’m an example of the power of real estate homeownership. I purchased my home back in 2010, right after the market crash, when almost nobody was buying. Everyone thought I was crazy for buying at that time, but I didn’t care—I’ve always been one to go against the grain. Fast forward to today, and the value of my home has tripled. I was able to lock in a low 3% mortgage and make improvements along the way. And this is just one house I’m talking about—the proof is in the numbers.
Investment Property and Wealth Growth
Real estate investment offers another wealth-building path. Many Hispanics have strategically purchased properties in middle- to upper-income neighborhoods, which have greater potential for equity growth. The report highlights how these choices have played a key role in closing the wealth gap.
The increasing participation of Hispanics in investment property ownership is an indicator of future financial security. It also suggests that Hispanics see the value of diversifying their real estate portfolios, despite challenges like affordability and access to credit.
Another example of my investment strategy is my portfolio of rental properties, along with investments in REITs (Real Estate Investment Trusts) and platforms like ArrivedHomes, which handles all the property management while paying me dividends. A key strategy I use is refinancing properties to free up equity for additional purchases. This allows me to grow my portfolio without needing to come up with large sums of cash upfront. I also take out loans to cover repairs and ensure I have reserves on hand in case of unexpected expenses. This approach not only maximizes my cash flow but also leverages my assets to continue expanding and securing my financial future.
Strengthening Hispanic Representation in Real Estate and Finance
The report also emphasizes the need to bolster Hispanic representation in both the real estate and mortgage sectors. As a Hispanic professional, I’ve seen firsthand how important it is to have culturally aware and linguistically fluent professionals who can meet the unique needs of Hispanic buyers. Increasing the number of Hispanic professionals in these industries will help open more doors to homeownership and wealth-building opportunities for our community.
Busting Myths About Hispanic Wealth
Unfortunately, there are many misconceptions surrounding Hispanic wealth and homeownership, which this report successfully dispels:
- Myth: The wealth gap between Hispanic and non-Hispanic White households is growing.
- Fact: The proportional wealth gap has shrunk by nearly half since 2013, especially among households headed by individuals under 35. The economic advancement of young Hispanics is on the rise.
- Myth: Hispanics primarily buy in low- to moderate-income neighborhoods.
- Fact: A significant portion of Hispanic homebuyers are purchasing in middle and upper-income areas, with 71% of homes bought by Hispanic borrowers located in such neighborhoods.
These statistics shed light on the economic power of Hispanic buyers and investors, which is often overlooked in mainstream narratives.
The Future: Expanding Business and Financial Assets
Aside from real estate, HWP has set ambitious goals to increase the number of Hispanic-owned businesses and financial asset ownership. Business ownership is growing rapidly, especially among Latina entrepreneurs, who are starting firms at a faster rate than the general market. Yet, access to capital remains an issue, and HWP is pushing for greater venture capital investment in Hispanic-owned firms.
On the financial side, retirement accounts and non-cash financial assets (like stocks and bonds) are slowly becoming more common in Hispanic households. However, the Hispanic community still tends to have much of its wealth tied up in real estate and businesses. Diversifying into financial assets can help Hispanic families secure a more balanced financial future.
I think this is an area where the Hispanic community is missing out, but I understand why—it’s often because their money is tied up in businesses or they may not fully understand the potential of investing. Personally, I invest in stocks, bonds, maintain a brokerage account, and contribute to both a SEP IRA and a Roth IRA. I’ve gone through rough patches where my investments were down, at one point by almost half, but they’ve since recovered and grown significantly. Like my primary residence, my portfolio has more than doubled in value.
I believe my money works harder in an S&P 500 ETF, like VOO, SPY, or SPLG, than it does sitting in a bank account. While banks offer less than 0.1% interest, the S&P 500 historically returns 7-9% annually. You’ve got to do your own research, and as Warren Buffett says, when you buy a stock, you’re buying part of a company. Invest in companies you believe in, do your homework, and have some fun with it. The goal is long-term growth—think 5 years or more, not short-term gains.
Another part of my investment portfolio is in tax liens, where I’m earning up to 16% interest. If the property owners repay me, I collect the interest; if not, I have the option to foreclose and take over the property.
The Importance of Estate Planning
Perhaps one of the most critical aspects of wealth preservation is estate planning. The report revealed that only 18-23% of Hispanics have a will or trust, compared to 39% of non-Hispanic Whites. This is an area where our community can improve, as proper estate planning ensures that wealth is passed down to future generations without unnecessary legal complications. The report underscores the importance of educating Hispanic families about the benefits of estate planning, especially as the community’s wealth grows.
I’m still a bit young to need a will, but my parents have a trust, and I’m the beneficiary. As I get older, I plan to set up a will and estate plan to protect my assets, portfolio, and finances. It’s important to have a plan in place as your wealth grows to ensure everything is properly managed and passed on.
Final Thoughts
The 2024 State of Hispanic Wealth Report paints a promising picture for the Hispanic community’s financial future, particularly through real estate investment. As more Hispanic households purchase homes, invest in properties, and grow their businesses, the economic power of the community continues to strengthen. However, challenges remain, especially regarding access to capital and financial services.
For me, as a Hispanic real estate professional and investor, these trends resonate on a personal level. I’ve seen firsthand how real estate and other investments can build wealth over time—whether through the value increase of my own home, my portfolio of rental properties, or my investments in REITs and platforms like ArrivedHomes. Beyond real estate, I’ve diversified into stocks, bonds, and S&P 500 ETFs, and I’ve experienced both the highs and the lows of the market. Even my tax lien investments are a part of this strategy, offering high returns and another path to financial growth.
Understanding these trends and strategies is crucial for helping Hispanic families and individuals achieve their homeownership and investment goals. By staying informed and advocating for more representation, we can make a real difference in closing the wealth gap and ensuring a prosperous future for Hispanic communities.
If you’re interested in learning more about real estate investment or exploring homeownership opportunities, feel free to contact me. Together, we can find the right strategy to help you build wealth through real estate.
AriZona Real Estate insider! 
Leave a comment