SEATTLE, Oct. 12, 2020 /PRNewswire/ -- Remarkable
growth this half-decade has boosted the share of Latinxi
households in the U.S. that own their home to its highest since the
housing bustii. While recent signs are encouraging, a
new Zillow® analysis reveals remaining roadblocks
on the path to equitable housing.
Latinx Americans are a massive and diverse group, with more than
200 unique ancestriesiii among the 60
millioniv who live in the U.S., and their homeownership
gains in recent years have far exceeded those of other groups.
About 18% of the U.S. population identifies as
Latinxiii, yet they have accounted for more than 60% of
new U.S. homeowner gains over the past decadev. That
growth has brought the Latinx homeownership rate to 48.9%, the
highest level since 2008.
This growth is even more striking when considered in the context
of the housing bust during the Great Recession, when Latinx
households took a disproportionately large blow. Less than 10% of
all U.S. homes are in largely Latinx communities, yet 19.4% of all
homes foreclosed upon between 2007 and 2015 were in these
neighborhoods. After gains in the 1990s and early 2000s, this
contributed to the Latinx homeownership rate falling to 44.1% in
2015 -- the lowest since 1998ii.
"While Latinx households have made recent gains in ownership,
longstanding inequities in intergenerational wealth and other
systemic barriers continue to impede Latinx Americans from reaching
parity with the U.S. population as a whole," says Manny Garcia, population scientist at Zillow.
"Latinx home buyers are more likely to face challenges during the
process, with financing the purchase often reported as a primary
concern. Even within the Latinx community, wealth inequality could
help explain the varying homeownership rates of people of different
origins."
Despite recent gains, the Latinx homeownership rate continues to
lag more than 10 percentage points behind the rate for Asian,
Native, Hawaiian and Pacific Islander households, and nearly 25
percentage points behind non-Latinx white householdsii.
A disparity in household wealth is likely a major contributor. The
typical Latinx household earns about 75% of the typical white
household as of 2018, but that typical white household held more
than eight times the amount of overall wealth. That means Latinx
households carry a far greater share of their wealth in their
homes, adding to the pain caused by the Great Recession.
Those who more recently moved to the U.S. are less likely to own
a home -- perhaps explaining why the homeownership rate among
first-generation Latinx Americans (46%) is lower than among other
generations (50%) -- as are those coming from less wealthy
backgrounds. Latinx Americans of Spanish descent have the highest
homeownership rate at 63%, while households headed by someone of
Dominican descent have the lowest at 29%iii.
Latinx buyers overall are more likely to be first-time home
buyers -- 56% report buying their first home, compared to 43% of
buyers overallvi. First-time buyers face greater
financial hurdles because they don't have access to equity
from a previous home purchase to help with a down payment and
almost always (80% of the time) finance their purchase with a
mortgage. Latinx buyers are denied by mortgage lenders at a
higher-than-average rate and 65% say they are concerned about
qualifying for a mortgage at allvi.
To reach homeownership, Latinx buyers more often put other life
milestones on hold because of the financial burden. More Latinx
buyers than average report that the cost of housing delayed
marriage plans (28% said so, versus 18% of all buyers), having
children (29% versus 19%) and retiring (26% versus
19%)vi.
Latinx
Identity*
|
Homeownership
Rate
|
Spaniard
|
63%
|
Argentinean
|
59%
|
Other, not
specified
|
56%
|
Bolivian
|
56%
|
South
American**
|
56%
|
Panamanian
|
56%
|
Chilean
|
55%
|
Cuban
|
55%
|
Peruvian
|
52%
|
Costa
Rican
|
52%
|
Colombian
|
51%
|
Uruguayan
|
51%
|
Mexican
|
50%
|
Nicaraguan
|
47%
|
Venezuelan
|
46%
|
Central
American**
|
45%
|
Ecuadorian
|
43%
|
Salvadoran
|
43%
|
Paraguayan
|
42%
|
Puerto
Rican
|
41%
|
Honduran
|
30%
|
Guatemalan
|
30%
|
Dominican
|
29%
|
*Source: American Community Survey,
2014-2018
**Survey participants were given the option to
select "South American" or "Central American" rather than an
individual country
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ZG).
iIn this analysis, "Latinx" refers to people and
heads of household that identify with at least one Hispanic, Latino
or Spanish origin
iiU.S. Census Bureau, Current Population Survey/Housing
Vacancy Survey, April 2020
iiiU.S. Census Bureau, American Community Survey,
2014-2018
ivU.S. Census Bureau, Population and Housing Unit
Estimates, 2019
vU.S. Census Bureau, Current Population Survey/Housing
Vacancy Survey, February 2019
viZillow Consumer
Housing Trends Report, 2020
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SOURCE Zillow