As reported in the Hispanic Pew Center’s latest study, minorities gained the most but also have lost the most from the historic homeownership boom that has turned to a bust with the economic crisis.
Rakesh Kochhar, a researcher with the Pew Hispanic center says, “During the recent housing boom, minorities and immigrants were key parts of the story line.”
The number of Americans who own their homes rose to 69 percent in 2004 from 64 percent in 1994, the fastest growth since after World War II.
The report details how the economic crisis has caused homeownership rates to drop back down to 67.8 since 2004., African-Americans and native-born Latinos were the hardest hit, diminishing some but not all of the gains they made in the past 15 years.
Subprime lending helped fuel the rapid growth of minority homeownership while also contributing to the foreclosure crisis and homeownership declines.
Although racial and ethnic gaps in homeownership are not as wide as they were ten years ago, a disparity still exists and has begun to widen again since 2004.
Almost 75 percent of whites owned homes in 2008, compared with 59.1 percent of Asians, 48.9 percent of African-Americans and 47.5 percent of Latinos.
Examples of the housing crisis have been felt in places such as Contra Costa County in California.
About half of African-Americans and Latinos who bought or refinanced a home in Contra Costa County in 2006 took out “high cost” loans, meaning the loans were probably subprime, while about 14 percent of their white counterparts took out high cost home loans that year.
Apolonio Morales, an organizer with the Contra Costa Interfaith Supporting Community Organization, said that local African-Americans and Latinos were more likely to be targeted for higher-priced loans and received higher interest rates than what white residents were asked to pay.
Morales stresses that, “It put them even deeper in the hole. Traditionally, these folks were never given credit and — out of nowhere — they were allowed to buy homes.”
Contra Costa County’s homeownership rate was 72 percent in 2008. Seventy-seven percent of the county’s white residents owned homes, compared with 66.8 percent of Latinos and 45.8 percent of African-Americans. The county reported a 5.5 percent foreclosure rate last year.
Kochhar says that counties with a high proportion of immigrants are more likely to have a high foreclosure rate, but he also said that immigration is not necessarily a cause of that trend.
He mentions that a variety of economic factors such as high housing costs, high unemployment rates and a prevalence of subprime lending play a greater role.
Immigrants, though far less likely than native-born residents to own homes, appear to have deflected some of the recent crisis. He states that, “Losses for immigrants in recent years have been modest compared to the native-born.”
To view the full report click here: pewhispanic.org/.
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