The national convention of the National Association of Hispanic Real Estate Professionals (NAHREP) begins today in Washington, DC. NAHREP brings together a variety of stakeholders to discuss Hispanic homeownership trends and opportunity - lenders, investors, real estate agents, non-profits, wealth management firms, and government.
2022 is going to be a year of purchase mortgage lending, and the Hispanic or Latino borrower segment will be a key growth factor for mortgage originators. We are actively supporting our clients and users of our mortgage market intel with actionable insights into how to capture the Hispanic purchase opportunity. The more lenders, and other stakeholders, understand the dynamics in the market, the better they will be able to serve the Hispanic community, provide access to finance and build wealth through homeownership.
We encourage loan originators to use the available mortgage and demographics data to analyze and sub-segment the Hispanic mortgage opportunity in order to sharpen their product and sales tactics. The data sets that are most useful for this are HMDA and Census data. By deriving insights from HMDA, lenders will find out what mortgage purchase loans Hispanic applicants are applying for. And by deriving insights from Census data, lenders will be able to measure market size, estimate marketing budgets, and plan loan offerings. We have modeled these two types of data in interactive dashboards that allow for immediate answer to questions about the mortgage opportunity and demographics by geographic location as granular as a census tract.
For example, let's say our target market is Bexar County, TX. Using HMDAVision, we find that the Hispanic mortgage market was 14,904 loans in 2020. The vast majority of these loans were originated to Gen X, Millennials, and Gen Z population. The use of conventional purchase mortgages was much less frequent (40.8%) than the use of conventional mortgages at the national level (58.3%) by Hispanic borrowers. Moreover, VA lending represents 17.7% of all Hispanic or Latino purchase loans in Bexar County. In short, successful loan originators in this county have offered a more diverse loan product suite in order to serve the Hispanic borrower segment.
Let's say that you want to build a lending team that lends to young Hispanic or Latino borrowers who are VA-eligible. Using U.S. Census data like American Community Survey (ACS) data, you can also understand the demographics in Bexar County for Hispanic or Latino population who have veteran status, or are currently on active duty, or are in training for the Reserves or National Guard. As shown in the dashboard screenshot below, you can narrow down further and focus on Generations - Gen X, Millennials, and Gen Z - who are more likely to purchase a home than lther generations. In Bexar County, there are about 10,341 Hispanic people eligible or potentially eligible for VA mortgage. This is your total addressable market for VA lending that you would want to get to know and start developing relationships with.
Based on those insights, we can construct the following potential target market for Bexar County, TX, VA Purchase lending in 2022.
Hispanic or Latino VA Purchase Lending in Bexar County, TX (Gen X, Millennials and Gen Z)
- Total addressable market for VA purchase loans (Hispanic or Latino Gen X, Millennials, Gen Z): 10,341
- Estimated VA purchase applications from Hispanic or Latino applicants: ~3,200
- Estimated Closing Rate: ~88%
- Estimated VA Purchase Originations Market in Bexar County (Hispanic or Latino Gen X, Millennials, Gen Z): 2,816
Assuming average VA purchase loan size of $325k, your market is estimated around $915 Million in Bexar County, TX for 2022.
Schedule 15 minutes with us to brainstorm about your lending or real estate business.