As the Hispanic population in the United States soars, the number of Hispanic households unable to afford to buy a home is also growing, a new report from The Demand Institute found.
Only 1.5 million of the 4 million Hispanics who would like to purchase a home can afford to do so, the report released May 28 noted. Meanwhile, by 2020, nearly 40% of new households will be Hispanic.
Many of those who cannot afford to buy a home do not have the credit, income or funds for a down payments, the report said.
The homeownership rate among Hispanics hit a peak of 50% in 2007, but has since fallen to 44% and shows signs of continued decreases. Hispanic households are also driving the rental market, in addition to purchases.
"Hispanics were hit especially hard by the financial crisis and housing crash, and the outlook for home ownership is uncertain," said Louise Keely, president of The Demand Institute, in a news release accompanying the report.
While Hispanics continue to struggle financially with the fallout from the financial crisis, a positive trend is their move to the suburbs. Hispanics are still more likely than the rest of the population to live in urban areas, but they are increasingly moving out of cities.
"Hispanic households are still most likely to be family households," said Jeremy Burbank, who is a vice president at The Demand Institute and leads the American Communities Demand Shifts Program that crafted the report, in the release. "Hispanics are moving to the suburbs for more space, better schools and more affordable housing - they're looking for places to raise their families."
The Demand Institute is a non-profit think tank run by The Conference Board and Nielsen.