Houston Chronicle

Study sees Hispanic homeowners­hip rising over 20 years

- By R.A. Schuetz STAFF WRITER

Hispanic homeowners­hip rates are projected to rise over the next two decades, and the number of older Black renters will double, according to a forecast from the Urban Institute, a reflection of broad demographi­c shifts and the lingering impacts of the Great Recession.

Researcher­s looked at census data from 1990 through 2018 to project what share of the adult population will head households and what share would be homeowners for every race, ethnicity and age group. The institute forecast 4.8 million more Hispanic homeowners, 1.2 million more Black homeowners and 2.7 million more Asian and other minority homeowners by 2040. But there would be 1.8 million fewer white homeowners.

Demographi­c trends drove the projected shifts.

“Basically, the white population is older, and homeowners­hip is very, very high for older whites,” said Laurie Goodman, one of the researcher­s on the report. Over the next two decades, many people aging into their prime homebuying years will be “disproport­ionately nonwhite, Hispanic, Asian and Black,” she explained.

Those national trends are reflected in projection­s for Texas as well. An analysis from the Hobby School of Public Affairs at the University of Houston found that even with no in-migration to Texas, from 2010 to 2050 the white non-Hispanic population of the state is projected to decline 6.8 percent. The Black

population would increase by 12.4 percent and the Hispanic population by 64.4 percent.

Jimmy Zarate, a real estate agent at eXp Realty in Houston, is already seeing the numbers of Hispanic buyers rise. “The fact that our population continues to grow is why the numbers are going up so much,” Zarate said.

The report suggested its findings underline the need to rethink how potential homeowners are qualified for mortgages. Workers who are self-employed or participat­e in the gig economy have a difficult time proving their income to the satisfacti­on of lenders, and it is difficult to count the multigener­ational households or roommates if they are not all on the mortgage — two challenges that especially impact minority homeowners.

Klaus Hernandez, a Houston real estate broker, said policymake­rs ought to consider that that first- and second-generation Latinos often do not have family members knowledgea­ble about the credit system and as a result begin building credit late. What’s more, building credit can be a challenge for people without a Social Security number. While there are ways to build credit and secure financing, he said, “this is a hurdle they have to go through.”

The report also found that a disproport­ionate number of Black and Hispanic adults do not have credit scores, suggesting that rental, telecommun­ication, utility or cable payment data could be used instead to help judge creditwort­hiness.

Goodman called the growing gap in homeowners­hip for Black families disturbing — the current homeowners­hip rate for Black families is lower than it was when fair housing laws were passed in 1968. The report suggested that the number of Black renters over 65 could double to 2.6 million in 2040, as a cohort reaches an age previously considered a bastion of homeowners­hip

Goodman traced much of that to the long-lasting impacts of the Great Recession, in which originator­s of subprime mortgages targeted Black households. The result, she said, is that fewer Black households headed by adults between ages 25 and 44 owned homes in 2010. What’s more, a smaller percentage of Black renters become homeowners. “So you end up with a compounded result”: By the time that generation reaches ages 55 to 74 in 2040, many more will be renters.

That’s based on current trends. As a result, the Urban Institute recommende­d changing a number of policies, including educating renters who would benefit from homeowners­hip, creating programs allowing borrowers with little wealth to sustain a mortgage, and creating more affordable housing.

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