Immigration and lower home-ownership rates among African Americans and Hispanics make minority buyers the fastest-growing segment of new home-purchase mortgages, according to a study of government loan data.

The study, “2005 Minority Home Buying Surge,” found the percentage increase for all minority loans in high-volume areas was three times greater than for white households. Minority borrowers had a greater percent change in mortgages originated in 320 of 388 metro areas analyzed.

“We are now witnessing the positive effects of the growth in immigrant households who want to own a piece of the American Dream,” said Michael Taliefero, managing director of ComplianceTech, in a press release. “While immigration is part of the story, the lower home-ownership rates among African Americans and Hispanics represent pent up mortgage demand that is starting to be filled.”

ComplianceTech prepared the study for Genworth Mortgage Insurance, focusing on home-purchase mortgages in high-volume metro areas with more than 1,000 loans per year for all minorities. The report relied on loan data collected by the government under the provisions of the Home Mortgage Disclosure Act to compile top-10 lists of the metro areas with the fastest growth in mortgage lending for all minorities. Top-10 lists were also compiled for Hispanic, African-American and Asian borrowers.

Three areas of Florida were identified as the fastest-growing markets for minority home buying — Ocala, Lakeland, and Cape Coral-Fort Myers — followed by Boise City-Nampa, Idaho; and Killeen-Temple-Fort Hood, Texas. Ocala saw a 90 percent increase in mortgage loans to minorities — 7.5 times greater than the 12 percent increase in home-purchase loans for whites.

The percentage increase in mortgage loans to Hispanics in the top 20 high-volume metro areas was nearly five times greater than for whites. Four of the top five fastest-growing areas for Hispanic home buying were in Florida — Ocala, Lakeland, Cape Coral-Fort Myers and Port St. Lucie-Fort Pierce — with Scranton-Wilkes Barre, Pa., coming in fifth.

In the top 20 metro areas with at least 500 African-American loans, home-purchase rates for blacks were up nearly five times more than whites. The top five high-growth markets for African-American home-buying growth were Lakeland and Ocala, Fla; South Bend-Mishawaka, Ind.; Cape Coral-Fort Myers, Fla.; and Killeen-Temple-Fort Hood, Texas. In Lakeland, growth in African-American home buying was 86 percent, or more than three times the 26.7 percent increase in home-purchase loans for whites.

In the top 20 metro areas with more than 200 loans to Asian Americans, the growth in home-purchase rates was five times more than whites. The top areas for Asian home-buying growth were Albuquerque, N.M.; Lubbock, Texas; Lakeland and Ocala, Fla.; and Phoenix-Mesa-Scottsdale, Ariz.

The ComplianceTech-Genworth study, released in conjunction with a mortgage industry conference on lending diversity, is the latest analysis of loan data collected annually by the Federal Reserve. Earlier this month, researchers at the Fed released their own report on 15.6 million loans granted by 8,850 lenders in 2005 — about 80 percent of lending nationwide.

The report found that blacks and Hispanics were more likely than whites to take out higher-cost loans, while Asians were slightly less likely to borrow money on costlier terms. 

The Fed report determined 54.7 percent of African-American borrowers took out higher-cost loans in 2005, compared with 46.1 percent of Hispanics, 17.2 percent of whites, and 16.6 percent of Asians.

The report did not attempt to identify why this happens, but suggested some lenders may engage in aggressive “push” marketing that makes it difficult for less-informed borrowers to determine the actual cost and terms of loans. Lenders who do business in higher-risk markets may also face steeper costs because they pay more for capital, spend more on marketing, and have a higher “flow-through” rate in which fewer applications results in loan approvals, the report said.

Minorities also continue to lag behind whites in home ownership. According to a recent study by the Joint Center for Housing Studies of Harvard University, the gap between white and minority home-ownership rates is narrowing, but remains about 25 percent. The study estimated that 76 percent of whites owned their homes in 2005, compared with 51 percent of minorities.

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