{"id":3627,"date":"2023-12-27T09:07:39","date_gmt":"2023-12-27T14:07:39","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=3627"},"modified":"2024-04-25T23:17:02","modified_gmt":"2024-04-26T03:17:02","slug":"hispanics-will-be-the-majority-of-new-homeowners-by-2040-can-the-market-meet-their-needs","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/hispanics-will-be-the-majority-of-new-homeowners-by-2040-can-the-market-meet-their-needs\/","title":{"rendered":"Hispanics Will Be the Majority of New Homeowners by 2040. Can the Market Meet Their Needs?"},"content":{"rendered":"\n
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This year\u2019s trend study from CoreLogic<\/a>\u00ae shows a steady rise in mortgage lending in mainly Hispanic neighborhoods.<\/p>\n\n\n\n

Hispanic buyers tend to be younger and less affluent than other buyers across the board. Many are coming into real estate as first-time buyers. They\u2019re motivated. Many will opt for FHA loans<\/a> if conventional loans are out of reach.<\/p>\n\n\n\n

Now, the proportion of Hispanic homebuyers will really surge. That\u2019s because of the young age of this segment of the U.S. population.<\/p>\n\n\n\n\n\n\n\n

Big Trend Over Time<\/h2>\n\n\n\n
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In 1990, Hispanics made up 7% of all buyers under age 65, according to Urban Institute figures. Within the next three decades, their ranks had more than doubled. Now, expect a tripling.<\/p>\n\n\n\n

By 2040, a fifth of new home buyers will be categorized as Hispanic. Among first-time<\/em> home buyers over the next two decades, most <\/em>will be Latinos\/Latinas.<\/p>\n\n\n\n

But are mortgage companies ready to accommodate and guide them through the process? While high home prices are a hurdle for most mortgage applicants, Hispanics are impacted more than most. Many of them are young people who\u2019ve never bought homes before.<\/p>\n\n\n\n

Even so, the volume of loans issued for borrowers moving into predominantly Hispanic neighborhoods is on an upward trend. Because of the relatively young age of so many of these applicants, lenders expect the trend to expand. Census figures show the median age of U.S. Latinos is about 31. So they make up the youngest cultural category in the nation.  <\/p>\n\n\n\n

More Debt Vs. Income<\/h2>\n\n\n\n

Now, why does this group have a harder time getting loan approvals? A lot comes down to debt-to-income (DTI) ratios.<\/p>\n\n\n\n

Debt versus income is the main sticking point in most home loan denials. But for Hispanic applicants, this issue is at least 3% more likely to be the key reason for not getting approved for a loan.<\/p>\n\n\n\n

National origin is correlated with bias in housing. Discrimination based on national origin offends the law. To learn more, see:\u00a0<\/strong><\/em>We Know It. We Denounce It. So Why Does Bias in Lending Persist<\/em><\/strong><\/a>?<\/strong><\/em><\/pre>\n\n\n\n
Last year, the overall mortgage application denial rate was 9%. But 13% of Hispanic applicants were turned down. This compels some of the applicants to turn to nonbank lenders. Off-the-radar lenders typically charge comparable borrowers more money for mortgages than regular banks and credit unions do. Hispanic and other minority applicants pay the highest rates overall for nonbank financing. Needless to say, paying more for a mortgage puts a borrower at a higher risk of default, and whole neighborhoods at higher risk for foreclosures.<\/p>\n\n\n\n
Sluggish Returns?<\/h2>\n\n\n\n
Once Latinos do buy homes, they tend to miss out on a lot of home value appreciation, notes a recent article in The Philadelphia Inquirer<\/em>. A new study, based on home price information gathered by Dr. Kevin C. Gillen of Drexel University, found that majority-Latino neighborhoods are the hardest hit in this respect.<\/p>\n\n\n\n
Versus majority-white neighborhoods, Latino neighborhoods experience a home value appreciation gap so severe, that they\u2019ve lost out on $33 billion in generational housing wealth. If not for the appreciation gap:<\/p>\n\n\n\n