While fewer millennials own their own homes compared to older generations, younger Latino families locally are trying to overcome financial challenges to accomplish that part of the American dream.
In the Rochester region, the rates of homeownership have remained flat among the millennial age group of residents between the ages of 20 and 36, fluctuating between 6 percent and 7 percent of homebuyers from 2009-16, according to U.S. Census information provided by the Greater Rochester Enterprise.
The overhang of the 2008 recession, high student debt levels, limited new construction of starter homes and the ongoing rise in home prices present constraints for young would-be buyers across the country, according to a 2017 report from the Harvard Joint Center for Housing Studies of Harvard University (http://bit.ly/2nLk8Ie). Homeownership rates in general, though, have decreased nationally since 2004, according to a 2016 report from the Pew Research Center (http://pewrsr.ch/2gOdPTz). The age of the typical head of household is older on average, according to the report.
Orlando Rivera, a licensed real estate agent and member of the Greater Rochester Association of Realtors, said he has represented many local millennials who want to buy homes, even as many of them have financial hardships due to student loan debt or a tough job market. He noted that many also are knowledgeable and fully engaged in the homebuying process as well.
“I find that they do quite a bit of research on the home purchase process, as the information is (out) there, they just need someone to help them interpret it,” he said. “The American dream of homeownership is still alive and well.”
Many Latino millennials, though, lack experience with the process, especially if they are the first generation of their families to live in the U.S., he said.
“I feel it is lack of understanding and education on topics of your finances and wealth building and tying it in to homeownership, (such as) making sure you keep your debt low and optimize your credit,” Rivera explained. “I know in my household growing up, those were unspoken topics, and my mother did not own a home and we struggled financially growing up. … We are doing our best to educate (young people) and encourage homeownership as a wealth-building tool.”
In addition to a lack of understanding about homeownership, lower incomes also play a major role in reduced purchasing power to buy homes, according to a report (http://bit.ly/2fBtRNT) from the Young Invincibles, a national organization created by students in 2009. An analysis of incomes in the report found that millennials earn less not just because they are earlier in their careers, but also because of an intergenerational decline in wages. Young-adult workers today earn $10,000 — about 20 percent — less than young adults in 1989.
Many of these young adults entered the job market during the economic downturn of the 2008 recession, which also put millennials on a lower economic rung since the onset of their careers, according to the Young Invincibles report that also projects lower earnings for the young adults of today throughout their working lives.
In her work over the last decade as a real estate corporate broker for Ibero-American Development Corp. (IADC) and the Marketview Heights Association in Rochester, Noel Vázquez said she has primarily worked with families in their 30s and 40s in purchasing homes.
“I have not seen any increase or decrease” in that age group, said Vázquez, who also is a construction manager with the IADC.
“I believe that the primary factors for low homeownership are insufficient credit history, derogatory items in their credit report and insufficient funds required for purchasing a home,” she said.
As a nonprofit organization, the IADC strives to provide services to increase homeownership, Vázquez noted, including the creation of action plans to establish credit, repair credit and creating budgeting plans that will enable residents to become homeowners in the future.
“However, repairing credit or saving funds in most cases is a long-term process, and (it’s) difficult to stay committed,” she said.
Luis Cruz-Sánchez is one such resident who overcame a credit problem due to his identity being stolen, said the native of Humacao, Puerto Rico. The IADC assisted him with paperwork and credit-counseling classes to resolve the credit issues and walked him through the mortgage process to buy a one-family home on Resolute Street, he explained.
The 36-year-old employee of LiDestri moved to Rochester with his wife several years ago to find stable employment and a better life. Years of paying rent and having nothing to show for it prompted him to look into purchasing a home, Cruz-Sánchez explained.
Four months ago, the couple was able to close on a house, he said. He encourages young people to monitor their credit, save money and buy a home, which was a happy and gratifying moment, Cruz-Sánchez said.
“I have realized all (my dreams) thanks be to God,” he said.