Latinx Homeownership Rate is Fastest Growing in the Nation
The trend is the start of a recovery for Latinx households, which were harder hit by the Great Recession because much more of those households’ wealth is in their homes.
Latinxs are buying homes at a higher rate than the overall U.S. population, beginning to close a gap between the Hispanic and white homeownership rate that has tripled since the start of the last century.
Affordability and racial inequity combined to compound a disparity throughout the past 12 decades. The typical Latinx household in the U.S. earns 75.7% of the typical white household income, and the typical Latinx household wealth is only 12.2% of the typical white household wealth. That means Latinx households carry a far greater share (64.7% vs. 38.1%) of their wealth in their home, which made those families harder hit when home values nosedived during the Great Recession.
The homeownership rate gap sat at 25.8 percentage points just four years ago. Despite recent gains, the gap — sitting at 24.7 percentage points in 2018 — will take decades to close if the current pace holds.
At the start of the 20th century, the gap was roughly eight percentage points. It widened significantly during and after each World War, and again during the Great Recession. Of all the homes foreclosed upon between January 2007 and December 2015, 19.4% were in Latinx communities – an unusually high number when you consider that only 9.6% of all homes in the country are in Latinx neighborhoods, according to a Zillow® analysis. By contrast, 81.2% of homes are in white communities, and they accounted for 66.4% of foreclosures during that time.
In 2007, near the height of the housing bubble, a home accounted for 73.1% of the typical Latinx homeowner’s total wealth, compared with just 46.5% for the typical white homeowner. Because their homes accounted for a much larger share of Latinxs’ household wealth, they had fewer outside assets to draw on when home values plummeted, and they owed more than their homes were worth. Most people who went through foreclosure were not allowed back in the market for seven years, which meant many Latinxs missed out on the post-recession rebound in home values.