Lack of info stalls Mexican-American homeownership desires - report shows how housing industry can add 2.2 million Latino homeowners nationwideMortgagePress.comNAHREP, Latino homeownership, Tomas Rivera Policy Institute
A lack of trusted sources of information is a key barrier to
homeownership facing Mexican Americans and keeping hundreds of
thousands of Latino families from achieving the American Dream,
according to a new study from the Tomás Rivera Policy
Institute at the University of Southern California entitled El
Sueño de Su Casa: the Homeownership Potential for
Mexican-Heritage Families. El Sueño de Su Casa also found
that when looking for trustworthy information about home buying,
Latinos of Mexican origin look to real estate professionals first,
followed by friends, co-workers and family. Based on a survey of
1,400 Atlanta, Houston and Los Angeles families of Mexican origin,
El Sueño de Su Casa provides an unprecedented look at
this fast-growing community's homeownership ambitions, neighborhood
preferences, and concerns and expectations about buying a home in
the United States.
"Homeownership is often considered the first step to wealth
creation for a family," said Dr. Harry Pachon, president of the
Tomás Rivera Policy Institute. "The Latino community in the
United States is projected to increase at record levels over the
next few decades. It is essential that policymakers, real estate
professionals, community groups and business leaders find new and
innovative ways to reach this market and help bridge the home
buying information gap."
The report's findings are timely because of the Latino
community's explosive growth and strong desire for homeownership.
Based on current projections, the Latino community is expected to
account for 31 percent of the nation's household growth between
2000 and 2010, making it the fastest growing minority group. At the
same time, the new report says 84 percent of Latino renters
"strongly" desire to buy a home and 55 percent plan on buying
within the next five years. As a result, the Institute estimates at
least 1.5 million Latino households will buy homes by 2010. But,
the report says, the housing industry could help another 700,000
Latino families become homeowners by taking several proactive
steps, such as providing more Latino renters with bilingual
outreach, counseling and access to innovative mortgage products. In
that case, the report predicts 2.2 million new Latino homeowners by
2010 and the Latino community would account for 19 percent of this
decade's jump in the national homeownership rate.
Latinos Rate Homeownership Information
Sources
Despite the Latino community's rapid growth, the report warns that
Latino homebuyers face several special hurdles to homeownership,
especially getting accurate information about qualifying for a
mortgage and buying a house. Specifically, the chief difficulties
anticipated by respondents who plan to buy within the next five
years were a lack of familiarity with the mortgage process (64
percent), saving for a down payment (53 percent) and finding a
trustworthy advisor (53 percent). In selecting trustworthy
advisors, 38 percent of the likely homebuyers surveyed picked real
estate professionals, followed by friends and co-workers (17
percent), and family members (16 percent). By contrast, relatively
few respondents named home buying seminars or classes (12 percent),
financial institutions (nine percent), community organizations (six
percent) and church groups (three percent). The National Association of Hispanic
Real Estate Professionals (NAHREP) hailed the results as
testimony to the real estate industry's role in expanding
homeownership opportunities.
"The report supports what we at NAHREP have found to be true in
the marketplace, that real estate practitioners have the most
influential role in assisting Latino families who want to buy
homes," said Gary Acosta, chair and co-founder of NAHREP. "As
trusted, well-informed advisors, practitioners have the ability to
help an entire generation of Latino families achieve the American
dream."
Dreamers, Planners, Doers and Achievers
El Sueño de Su Casa stresses that not all
Mexican-American households are alike and the housing industry must
understand the differences in order to design outreach and mortgage
initiatives that target each group's specific home buying
needs.
"We took an innovative approach to understanding the path to
homeownership, conceiving home buying as a process with certain
stages and milestones," said Dr. Jongho Lee, Tomás Rivera
Policy Institute senior research associate and report co-author.
"In doing so, we were able to provide a clear picture of the
potential Latino homeowner and the obstacles that stand in their
way of owning a piece of the American dream."
To more precisely track specific needs and opportunities in the
Latino housing market, the Tomás Rivera Policy Institute
breaks the market down into three distinct home buying groups.
These groups include: Dreamers (29 percent), who want to own, but
say they are unlikely to buy within the next five years; Planners
(44 percent), who expect to become owners within next five years;
and Doers (11 percent), who are actively shopping for a house or in
contact with a lender. The remaining 16 percent are considered
Visitors and indicated that they do not plan to buy a home. The
report also polled 374 Achievers, households that bought their
first house within the last two years.
Overall, the report says, Dreamers and Planners are 34 years
old, 72 percent are foreign born, 63 percent are married and the
average household has 1.7 children. Regarding their financial
picture, only 38 percent of Dreamers and Planners report incomes
over $35,000, 52 percent have bank accounts and 50 percent have
credit cards. Dreamers and Planners say they are unable to buy a
home in the immediate future because they cannot find a house they
can afford (43 percent), face an insecure financial situation (27
percent), may leave their current city soon (six percent) or are
waiting to have children (four percent).
By contrast, the average age among Doers and Achievers is 38
years old; 79 percent are married, 64 percent are foreign born, and
the average household has two children. These two groups are also
more financially developed, the report says. Forty seven percent
have incomes above $35,000, 67 percent have bank accounts, and 60
percent have credit cards. In addition, 74 percent of Doers and
Achievers are U.S. citizens or permanent legal residents, compared
to 58 percent of Dreamers and Planners.
Home Buying Readiness, Capacity Varies
Widely
The readiness and capacity to become homeowners varied widely
among the different groups, the report says. For example, 51
percent of Doers said they were familiar with the mortgage process
compared to only 29 percent of Dreamers and Planners. But, large
percentages of each group believe that U.S. banks will not lend to
a non-U.S. citizen (55 percent of Dreamers and Planners and 51
percent of Doers and Achievers), although many lenders now
routinely make mortgages to legal residents who are not U.S.
citizens.
The groups also anticipated different difficulties along the
route to homeownership. Although 62 percent of Dreamers and
Planners expect down payments to be a problem, only 43 percent of
Doers expressed the same concern. Similarly, more than half (51
percent) of Dreamers and Planners said they are uncomfortable using
English compared to 40 percent of the Doers. Finally, when shopping
for a home, 43 percent of the Dreamers, Planners and Doers said
they want to buy a house in or near their current neighborhood,
with 32 percent saying they want to move to a different
neighborhood, 18 percent planning to move to a different city and
eight percent saying they plan to move to a different state. In
fact, first-time homebuyers ended up purchasing in or near their
old neighborhood 41 percent of the time, in a different
neighborhood in the same city 36 percent of the time, in a nearby
city 14 percent and in a different state nine percent of the
time.
Prospective homebuyers also said the most desirable qualities
they look for in a new neighborhood were a low crime rate (44
percent), good public schools (39 percent) and friendly neighbors
(24 percent). Less important qualities include access to public
transportation (10 percent), proximity to relatives (nine percent)
and other Latinos (six percent).
For more information visit www.trpi.org.
