Hispanic households grow, accounting for more than half of new homeowners
Hispanic households accounted for more than half of the nation's homeowners in the third quarter, evidence of the potential purchasing power of Latinos during the housing recovery.
According to Census Bureau data provided by Alejandro Becerra, former senior housing fellow at the Congressional Hispanic Caucus Institute, the number of Hispanic owner-occupiers grew by 288,000 from 6.21 million in the second quarter to 6.49 million in the third quarter.
Of 545,000 new household units in the third quarter, 53% were Hispanic households. The remaining 47%, or 257,000 units, consisted of other minority groups and non-Hispanic whites.
"We have to give due cause to Hispanic real estate professionals, to the many nonprofit groups out the that are trying to put into place the foreclosure prevention programs to keep people in their homes, to help new homebuyers," Becerra said. "All this is beginning to bear fruit in reaching out to these households."
Minority households are taking advantage of the lower end of the housing market where, Becerra believes, prices have hit the bottom. "It's the only place where the possibility of buying is right now," he said.
In contrast, middle-income families and even upper income households are stalled because many of them owe more than their homes are worth "so the only hope for the future has to come from the younger households who are able to buy now," Becerra said. The chart below, provided by National Association of Hispanic Real Estate Professionals, shows the growth of Hispanic purchasing power has more than doubled.
According to Fannie Mae's 2010 third-quarter housing survey, 61% of Hispanics said they expect their financial situation to get better over the next year, compared to 41% of all Americans and 57% of Hispanics consider owning a home a symbol of success whereas only 33% of all Americans feel that way.
Ernie Reyes and Gary Acosta, co-founders of NAHREP said home-buying activity among Latinos will be even greater as the market stabilizes. Reyes and Acosta have tracked the progress of Hispanic home ownership over the past 10 years.
“Latinos do not believe in renting. “They believe in owning,” says Reyes. “If our community was given half the opportunity it deserves, this volume would grow by leaps and bounds.”
Foreclosures related to the subprime crisis delivered a highly disproportionate blow to Latinos, however.
Blacks and Hispanics with credit scores higher than 660 received subprime and option adjustable-rate mortgages three times as often as white borrowers in similar financial standing between 2004 and 2008, according to a new study from the Center for Responsible Lending.
"Hispanics are now helping struggling local economies across our nation through population growth and purchase power. We believe these same dynamics will be a driving force in the resurgence of the housing market in the near term," said NAHREP President Carmen Mercado.
NAHREP is a 20,000-member real estate trade association with 50 affiliate chapters in 48 states.
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