HUD: Hispanics have most to gain from national economic recovery
Recognizing the impact the financial crisis had on Hispanics and their growing purchasing power, Housing and Urban Development Secretary Shaun Donovan said they stand to benefit the most from a revitalization of the American economy.
Speaking at the National Association of Hispanic Real Estate Professionals policy conference in Washington, D.C., Donovan said no one has been hit harder by the financial crisis than the Hispanic community.
From 2005 to 2009, median wealth dropped 66% among Hispanics and 53% among blacks, compared to 16% from whites, according to Pew Research Center analysis of Census Bureau data.
Median home equity held by Hispanics dropped to $49,145 in 2009 from nearly $100,000 four years prior. Pew said it was caused by the share of Hispanics making up populations in California, Florida, Nevada and Arizona — the states hardest hit by the downturn.
"That's an absolute tragedy. Completely unacceptable," said Donovan, mentioning that one-third of Hispanics owe more on their mortgages than what their homes are worth.
Donovan touted the government's efforts to "push harder, keep making progress and knock down barriers" in boosting the housing industry.
He cited the Home Affordable Refinance Program's ability to increase refinancing in the aforementioned sand states.
The Mortgage Bankers Association reported Wednesday that monthly refinance applications in February grew 49% in Florida, 61% in Arizona and 71% in Nevada. Refinances in the rest of the country were generally flat or even down.
Donovan praised HUD's Neighborhood Stabilization Program, saying its success depends heavily on commercial revitalization in communities that suffer from foreclosures and abandonment.
Although the wealth of Hispanic communities vastly shrunk during the financial crisis, their purchasing power remained resilient.
Latinos saw purchasing power more than double over the past decade, compared to a 52% increase for the country as a whole, a sign of their continued growth in influence on the economy and housing market. The measure is expected to increase another 48% for Latinos to $1.6 trillion by 2016, according to NAHREP.
Homeownership rates among Latinos fell to 46.9% in 2011 from 47.3% in 2001, a milder decline than the overall U.S. drop to 66.1% from 67.8%.
"Block by block, neighborhood by neighborhood," Donovan told the NAHREP members, referring to how Hispanics and the nation as a whole will return to economic prosperity.
NAHREP is a 20,000-member real estate trade association with 50 affiliate chapters in 48 states.