The 70% by 2040: what the number actually says
The number this movement is named after is almost always quoted wrong. Here is what the Urban Institute projects, what it does not say, and why the difference changes everything.
Where the number comes from
The figure comes from the Urban Institute report The Future of Headship and Homeownership, by Laurie Goodman and Jun Zhu. The projection covers 2020 to 2040.
What it says: about 70% of all net new homeowners in the United States between 2020 and 2040 will be Hispanic.
The misread
Net new homeowners is not the same as homeowners. It is the growth, not the total. And it is not a rate.
When someone hears Rumbo al 70 and understands it to mean 70% of Latinos will own a home, they are hearing something else. The Hispanic homeownership rate goes from 49% in 2020 to 51% in 2040. Two points in twenty years.
That gap is the whole movement. The growth is not coming from buying getting easier. It is coming from there being more of us, and from us being young.
The full numbers
Net new homeowners between 2020 and 2040, in millions of households:
| Group | Net new homeowners |
|---|---|
| Hispanic | 5.0 million |
| Asian and other | 2.7 million |
| Black | 1.2 million |
| Non-Hispanic White | minus 1.8 million |
And homeownership rates, before and after:
| Group | 2020 | 2040 |
|---|---|---|
| Overall | 65% | 62% |
| Non-Hispanic White | 73% | 71% |
| Hispanic | 49% | 51% |
| Black | 42% | 41% |
| Other | 58% | 57% |
Age explains a lot of it. Young Hispanic households went from 7.3% of all young households in the country in 1990 to 16.4% in 2020, and are projected to pass 20% by 2040.
What the Urban Institute says it will take
Three recommendations, straight from the report.
One, down payment assistance. Expand the programs that exist and give real visibility to housing counseling and financial education.
Two, mortgage credit access. Update underwriting so it counts on-time rental payment history and supplemental income from other household members. Reconsider credit scoring models and how debt-to-income is calculated.
Three, housing supply. Build more affordable units and design homes that work for multigenerational families.
What I see in my own closings
Of the last twenty buyers I worked with, two out of three were not ready to qualify when we met. And almost none of them were a credit problem. They were down payment, income and documentation.
Recommendation two, counting rental history and income from other family members and rethinking how debt-to-income is calculated, is literally the description of several of my files.
I am not quoting a projection. I am working the case.
What to do with this
If someone told you that you cannot buy, that is not a permanent no. It is one person's no, on one date, with the information they had. Most of the families I work with start six to twelve months before they buy, repairing credit, sorting out how they file taxes, or putting the down payment together.
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