The housing market has thrived during this pandemic, with home sales up to a 14-year record high. Also at a record high is the growth in buyers from historically disenfranchised communities.
“It took me four years of saving each penny, but it was worth it at the end of the road,” said Marco Castillo.
Castillo is half Ecuadorian and half Puerto Rican. He moved from Puerto Rico to Virginia in 2016. After four years working a lead graphic designer, managing a graphic design team in Washington, D.C., he finally saved enough money to realize his dream of home ownership earlier this year.
“You cannot describe this, but it was that feeling of accomplishment, like ‘I did this! I worked hard, and I’ll continue working hard for it,’” said Castillo.
However, it wasn’t easy getting to that moment. Castillo started the home-buying process right at the beginning of the pandemic and lenders wanted extra assurance he could continue to afford purchasing his first home. It was a four-bedroom house in a suburban Maryland community.
"By sending everything that they needed, doubts were always popping [up], like ‘Is this guy going to be able to pay for his home? Are we sure that he is working? Is the company going to close?’” said Castillo. "I mean, it was hard, it was hard for us.”
It’s usually not an easy process to buy a home and particularly difficult for minority home buyers. The U.S. Department of Housing and Urban Development recognized that minority home buyers historically have dealt with at least five barriers to home ownership. They include:
- A lack of capital for the down payment and closing costs
- A lack of access to credit and poor credit history
- A lack of understanding and information about the home buying process, especially for families for whom English is a second language
- Regulatory burdens imposed on the production of housing
- Continued housing discrimination
Despite these societal barriers in becoming a homeowner and the added layer of difficulty with a pandemic, more minority home buyers are realizing this dream.
In fact, data from the U.S. Census Bureau shows minority home ownership hit record highs this year. In the first quarter of 2020, overall U.S. homeownership rose 1.1% from Q1 in 2019, but amongst minority home buyers, it was double that at 2.2%. The highest growth rate was seen in the Hispanic community. So far this year, Hispanic home buyers account for roughly 40% of millennial and first-time home buyer applicants.
“For Hispanics, it is not just something that is economic. It is a piece of the American dream,” said Sara Rodriguez.
Rodriguez is the National President at the National Association of Hispanic Real Estate Professionals. Her organization conducted a survey that shows that even with the Hispanic community being one of the hardest hit in recent months, growth in their home ownership is expected to continue to rise in 2021.
“We saw by asking all of these great questions that Hispanics are still putting money away, what they are doing now is that they are getting together in multi-generational households so they can actually pull together resources and money to buy their dream homes,” said Rodriguez. “Hispanics are putting money away not just to buy principal residences but to buy investment homes. About 55% of them wanted to put money away and were in the process of doing this so they can buy investment homes."
Also expected to help with future growth in the Hispanic community and all minority communities are new commitments from big banks. In recent months, banks like JP Morgan Chase, Fifth Third bank, Wells Fargo, and Bank of America have pledged billions of dollars to expand current programs and create new ones that focus on lending to prospective and current minority homeowners. The programs are expected to help with improving access to credit and with down payment assistance for new and current minority home buyers.