Home Ownership: Many Factors Seen Converging to Help Hispanics Buy Homes
Brockman, Joshua, American Banker
When Elena Duran began hosting a call-in radio show about homebuying for Spanish-speaking immigrants in Chicago, she expected questions about mortgages and how to get them.
Instead, callers bombarded her with complaints about predatory mortgage brokers who sought fees and offered sky-high refinancing rates.
"By the reaction of the lights and the phone, I knew that I had reached a weak spot," said Ms. Duran, who has spent 20 years as a counselor with Neighborhood Housing Services of Chicago.
Brokers who prey on the naivete of newcomers are just one factor holding back homeownership among Latinos, housing experts say. Though the Hispanic population of the United States has been rising rapidly, homeownership among Hispanics persistently lags other groups and the population at large.
Lately, the gap has narrowed slightly, due in part to concerted efforts by neighborhood public service groups, banks, Fannie Mae, and Freddie Mac. Outreach programs, recruitment of bilingual bank officers and housing counselors, and the growing affluence of the Hispanic population have helped boost Latino homeownership rates, which are now rising more quickly than rates for other minority groups and for the general population.
The obstacles to Latino homeownership-discrimination, language barriers, mistrust among certain immigrants of financial institutions-have not gone away. But experts say the thriving economy has helped banks and housing organizations commit greater resources to helping this population.
At the end of the first quarter, 46.2% of Hispanics owned homes, well below the national average of 66.7%, according to the Bureau of the Census. The figures for Hispanics were lowest among the segments broken out in the Census: 46.9% of blacks owned homes, as did 51.2% of households with less than the median family income, and 52.2% of female-headed households.
But Hispanics are making faster gains. Census Bureau figures show that the Hispanic homeownership statistic is 4.9 percentage points higher than it was five years ago, when 40.3% of Hispanics owned homes.
Among the general population, homeownership rose 2.9 percentage points in five years, from 63.8% to 66.7%. Blacks saw a 4.5- percentage-point increase, from 42.4% to 46.9%; ownership by low-income families rose 3.1 points, from 48.1% to 51.2%; and among female-headed families it rose 3.9 points, from 44.4% to 48.3%.
"Certainly, the Hispanic homeownership rate leaves an awful lot to be desired," said Michael F. Coffey, vice president for expanding markets at Freddie Mac. But "the potential is there. A lot of the recent immigrants will greatly short-circuit what was perceived to be the normal waiting period before people would buy a home."
Banks-particularly ones that rely on business in minority neighborhoodssay they have been trying to counteract the forces stifling homeownership among Hispanics. Their reasons do not stem from altruism: as second and third generations of Latino immigrants begin to prosper, banks have come to view more of the Hispanic population as ripe mortgage prospects.
The government-sponsored enterprises have created educational materials in Spanish to help lenders and community groups. Banks describe a host of outreach programs and flexible lending terms.
The efforts seem to recognize that people from Latin cultures are blending into the mainstream, yet their financial needs are largely waiting to be served.
"This is a population that is very aspirational, that believes in the American dream," said Henry G. Cisneros, the former secretary of the Department of Housing and Urban Development, in a telephone interview. "Continuous, systematic attention to the Latino consumer is a strategy that will pay off now."
Mr. Cisneros, president and chief operating officer of Univision Communications Inc., a Spanish-language television network in Los Angeles, said Hispanic immigrants are the fastest-growing segment of homeowners in Southern California, a geographic pocket dense with wealthy Latinos. …