Hit hard by the financial crisis and housing market crash of 2008, Hispanics face an uphill battle for homeownership, according to a recent report by The Demand Institute.
The nonprofit think tank that studies shifts in consumer demand said that in 2007, the Hispanic homeownership rate peaked at nearly 50 percent, but it has been in decline ever since. Nearly 4 million Hispanics would like to purchase a home the next time they move, but only 1.5 million are financially prepared to do so, according to the report, “Hispanics & Home Ownership: Closing the Gap.”
Despite these challenges, between now and the end of the decade, roughly 40 percent of every 10 new households will be headed by someone of Hispanic descent, more than any other single racial or ethnic group, the report found. With more Hispanics moving to the suburbs in search of more space, better schools and more affordable housing, the Hispanic demographic will be a key driver of home rental and purchasing activity in the next several years, the institute said.
So why the gap?
Less than half of Hispanics who plan to move soon and want to purchase their next home are hampered because they do not have a down payment saved, and they are still suffering from income and credit issues stemming from the financial collapse, the report found.
“Their prospects for homeownership and what they will seek from communities in a lot of ways reflect the outlook for the entire country,” said Louise Keely, president of The Demand Institute. “The outlook for homeownership is uncertain. Still, Hispanics are a large and fast-growing segment of the housing market, and their distinct demand for communities and housing could stimulate innovation for a wide range of businesses, including financial services.”