Hispanic buyers could kick recovery into high gear
Hispanics accounted for more than half of new owner-occupied households last year and have the purchasing power "to push the U.S. housing recovery into high gear," according to an annual report from the National Association of Hispanic Real Estate Professionals (NAHREP) released today.
In its 2012 State of Hispanic Homeownership report, the trade group said Hispanics have posted gains in jobs, income, education, and household formation that make them ready to drive demand in the housing market, but that scarce for-sale inventory and policies that favor investor buyers are holding them back.
"Despite a difficult economic environment and a tight mortgage market, Latinos are making gains in all the ways that make them ready for homeownership," said Juan Martinez, NAHREP's newly elected president, in a statement. "Their biggest obstacle now coming into the market isn't the credit crunch, it's the lack of available housing to purchase. They will play an increasingly significant role in the nation's home purchase market, if conditions permit."
The most significant barriers to Hispanic homeownership are government and corporate policies targeted to investors, such as REO-to-rental programs, that have removed affordable housing stock from the owner-occupied market, creating an imbalance in supply and demand, NAHREP said.
In 2012, almost half of homes $250,000 or less were purchased by investors, including Wall Street firms, the report said.
"Property disposition strategies that favor investors and Wall Street firms such as auctions, bulk sales, and 'drop-bid' trustee sales should be discontinued in markets where there is a strong demand for residential properties," the trade group recommended.
Hispanics made up 355,000, or 51 percent, of the total net increase of 693,000 owner-occupied households in 2012, the report said. Though the housing crisis dealt a significant blow to Hispanics' level of wealth, the number of Hispanic homeowners grew 58 percent, from 4.24 million to 6.69 million, between 2000 and 2012, compared to a net increase of 5 percent for the remainder of the U.S. population, NAHREP said.
Although the Hispanic homeownership rate fell to 46.1 percent in 2012 from 47.5 percent in 2010, the raw number of Hispanic households rose by nearly half a million due to household formation exceeding more than 1 million households among the group. At the same time, households among non-Hispanic whites fell by 704,000. Hispanic households tend to be larger than those of non-Hispanic whites and are twice as likely to be made up of a married couple with children, the report said.
Between 2000 and 2010, Hispanics accounted for 37.3 percent of the net growth in all U.S. owner households, rising to a 10.4 percent share of U.S. homeowners. The average annual increase for Hispanic owner households between 2000 and 2012 was 3.9 percent, nearly 10 times that of non-Hispanic owner households (0.4 percent).
