Real estate ups and downs harder on minorities
A new study shows that the real estate crash has hit minorities far harder than it has white homeowners.
The study, released by the Pew Hispanic Center, a project put out by the well-known Pew Research Center, says that though minorities bought homes at a faster rate than did white buyers from 1995 to 2005, the decline in their homeownership levels since 2004 has been sharper.
The study is summed up well in this story in the Los Angeles Times. The highlight, or low light is that the homeownership rate for black households dipped 1.9 percentage points from 2004, while the rate for U.S.-born Latinos has dropped 2.6 percentage points from 2005.
These numbers are significant because the homeownership rate for the nation as a whole only dropped 1.2 percentage points from 2004.
According to the Times story, the homeownership rate for black households is now at 47.5 percent, while the rate for U.S.-born Latinos now stands at 53.6 percent. Both figures compare unfavorably to the national homeownership rate of 67.8 percent.
The numbers are disappointing because minority buyers purchased homes at such a fast pace from 1995 to 2005, according to the Pew study. During this time, homeownership rates among Latinos rose 9 percentage points and for African Americans 7.5 percentage points.
The housing slump, unfortunately, has erased some of these gains. The hope, of course, is that once the housing market begins its long-awaited recovery, we’ll see the homeownership rates of minority buyers increase again.
Let’s just hope this increase doesn’t come at the expense of sound lending decisions. The one thing no one wants is to see mortgage lenders focus on increasing the homeownership rate at all costs. This led to the many bad mortgage loans that were made during the housing boom.
