Latinx homeownership rising fast but will take years to match whites

Zillow research shows unfair burden on Latinxs from Great Recession

Latinx homeownership rising fast but will take years to match whites

The homeownership rate is growing faster among Latinxs than the wider population but there is a big gap to close.

A tripling of the gap between Hispanic and White homeownership rates since the start of the last century means a rise from around 8% at the start of the 20th century to 25.8% four years ago.

Zillow research shows that the gap closed to 24.7% in 2018 so even at the current pace, it will take decades to close completely.

The issue is worsened by income disparity with the typical Latinx household earning 75.7% of the typical white household income and the typical Latinx household wealth just 12.2% of the typical white household wealth.

With Latinx households carrying a far greater share (64.7% vs. 38.1%) of their wealth in their home, those families were harder hit when home values slumped during the Great Recession with Latinx housing wealth slumping from 73.1% of their total wealth in 2007 (compared to 46.5% for white households).

Fewer mortgage denials
On a positive note, Latinxs are facing fewer mortgage denials (15.5% in 2016 for conventional loans, down from 31.3% in 2008) but it is still almost twice the denial rate for whites (8.1%) likely at least partly due to income, debt levels, credit scores and savings.

Also, Latinx home buyers are more likely to mention discrimination as a concern when trying to qualify for a mortgage (54%) compared to 30% of white buyers.

"In the face of a seemingly insurmountable disparity, the good news is that the Latinx homeownership rate is climbing and, as a group, they want to own homes," said Skylar Olsen, Zillow's director of economic research. "If that trend is supported, it will help build up the Latinx middle class and create a strong driver for the whole economy. Regardless of race or ethnicity, a growing diversity of housing options is essential for the wealth building and health of all communities."