Latinx Homeownership on the Rise, With Young Adults Helping to Bridge the Gap by Liz Dominguez
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ver the past seven years, the seasonally adjusted homeownership rate has either increased or remained stable, buoyed by advances in the Latinx community and by young adults in general. According to a report by Zillow, Latinxs are purchasing property at higher rates than the general American population. “In the face of a seemingly insurmountable disparity, the good news is that the Latinx homeownership rate is climbing and, as a group, they want to own homes,” said Skylar Olsen, Zillow’s director of Economic Research, in a statement. “If that trend is supported, it will help build up the Latinx middle class and create a strong driver for the whole economy. Regardless of race or ethnicity, a 28 December 2019 RISMedia’s REAL ESTATE
growing diversity of housing options is essential for the wealth-building and health of all communities.” According to Freddie Mac, of all U.S. homeownership gains, Hispanics account for 62.7 percent, with about 485,000 new households formed in 2018. While there has been progress, helping to close the gap between Hispanic and white homeownership, there’s still a rift.
What are the challenges? According to Freddie Mac, there are three major ones: insufficient credit scores; the inability to afford a down payment; and insufficient income for monthly payments. Affordability, in general, is the primary obstacle. The income gap is wide, as the typical Latinx household only earns 75.7 percent of what average U.S. white households earn, according to the report by Zillow. In terms of overall wealth, Latinx households typically hold only 12.2 percent of the average white household wealth. This, compounded with racial inequality, creates a major hindrance to homeownership. The last housing bubble played a major role, too. Compared to white households, Latinx homeowners carry a greater share of their wealth in their property (38.1 percent versus 64.7 percent), according to the report. For many Latinx homeowners, even more of their wealth was tied to their home (73.1 percent)
