Rate of Latino Home Buying Declines as Prices Climb
By DANNY KING
Rising home prices and low-wage jobs for recent immigrants have pushed down Latino home ownership in California, according to a study being released this week.
The report found that 41 percent of Latino households were homeowners in 2000, down from 48 percent in 1980. Among the population as a whole, home ownership stood at 57 percent in 2000.
“It’s sort of a race,” said Joel Kotkin, senior fellow at Pepperdine University’s Davenport Institute for Public Policy and an author of the report. “Can Latinos increase their incomes fast enough to match the price increase in homes? If you do not have access to generational wealth, it’s really tough.”
In some ways, the experience of Latinos mirrors that of earlier immigrant waves. Less than a third of the state’s Latinos born abroad are homeowners, the report found, while two-thirds of U.S.-born Latinos owned homes, the same as California’s Anglo population.
The tide of Latino immigration comes as only 27 percent of California’s population could afford a median-priced home, which in June cost $324,400. This has particularly affected the Latino community, 60 percent of whose homes cost less than $150,000.
“As the generations pass, we would expect Latinos to achieve home ownership rates that don’t look far different from their white counterparts,” said Stuart Gabriel, director for USC Lusk Center for Real Estate.
In the meantime, he said, “We have an affordable housing deficit.”
Despite the run-up in prices, more than a quarter of all Latino homebuyers between January 1999 and June 2002 85,000 in all purchased homes in L.A. County, the report found.
The report, which in addition to Pepperdine was prepared by the La Jolla Institute and Cultural Access Group Inc., finds that Latinos have shown a proportionally larger investment in home ownership than other ethnic groups.
Home equity makes up 71 percent of Latinos’ net worth, versus 40 percent for Anglos. Latinos also spend a proportionally larger share of their income 38 percent on mortgage payments than do other groups.
Rising prices may drive portions of the population away. Kotkin and Gabriel referred to cities like Charlotte, N.C. and Omaha, Neb., whose Latino communities have grown substantially within the last decade because of migration away from high housing prices.
“For some people, it’s going to make sense to move, but how good is that long-term for California,” said Kotkin. “Do you want to lose your most productive and ambitious population?”