Hispanic homeownership inches up despite higher hurdles to financing
The Hispanic homeownership rate increased for the fourth consecutive year, despite the fact that the demographic remains more exposed to barriers to buying a house than the general population.
The rate for 2018 increased to 47.1% from 46.2% in 2017, according to a report from the National Association of Hispanic Real Estate Professionals. The high point was 49.7% in 2006 and 2007.
The number of Hispanic households that own a home increased by 362,000 to an all-time high of nearly 7.9 million units, said the report, which cited U.S. Census Bureau data.
Hispanics make up 18.1% of the country's population, which is expected to grow to 24.6% by 2045.
Among the top three barriers to homeownership, as identified by Fannie Mae, having an insufficient credit score or history affects 31% of Hispanics compared with 25% of the general population.
Affording a down payment or closing costs is a barrier for 30% of Hispanics versus 29% of the general population. When it comes to not having sufficient income to make monthly payments, 24% of Hispanics are affected compared with 17% of the general population.
Hispanic families derive 39% of their wealth from owning a home, but this is down from 52% prior to the recession, a separate NAHREP report said.
"For Latinos, mean net housing wealth, or the value of home minus any debts owed, is $129,800 compared to $215,800 for white families," NAHREP's Hispanic Wealth Project report said. "This is an indication that while the rate of homeownership is increasing for Hispanics, loan terms or the return on investment on their homes might be disproportionately lower than for white households."
Affordability is an issue when it comes to moving Hispanic householders to ownership from renting.
It takes Hispanic households four years to save for a 5% down payment and 15.7 years to save 20%, the wealth report said, citing CoreLogic data.
For white households it is 2.2 years and 10.2 years, and 3.3 years and 12.2 years, respectively, for Asian households. The time frames for black households are 5.7 years and 10.8 years.
"By the year 2060, nearly one in three people in the U.S. will identify as Latino, so the future of the U.S. economy will be intrinsically tied to the economic success of the Latino population," Gerardo Ascencio, chairman of the Hispanic Wealth Project, said in a press release. "As baby boomers continue to age out of the American workforce, Latinos will fuel the necessary growth needed to sustain the U.S. economy."