Latino homeowners

Latinos hit worst as minority vs. white wealth gap reaches record

Source: Pew Research Center

A report highlighted in an earlier post today questioned the long-term upward mobility of immigrants in the United States, in light of the recession and a predicted slow recovery. And at least as far as Latinos are concerned, the numbers in another new report seem to bear out the economic beating some have taken.

According to the Pew Research Center, Latinos’ median household wealth plummeted between 2005 and 2009. From the summary:

Median household wealth among Hispanics fell from $18,359 in 2005 to $6,325 in 2009. The percentage drop—66%—was the largest among all racial and ethnic groups, according to a new report by the Pew Research Center’s Social & Demographic Trends project. During the same period, median household wealth declined 53% among black households and 16% among white households.

In a nutshell, the recession has widened the wealth gap between whites and minorities to a record level.The analysis found the median wealth of white households to be 18 times that of Latino households, and 20 times that of black households. The report reads:

These lopsided wealth ratios are the largest in the quarter century since the government first published such data, and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession.

Partly to blame is the housing market crisis, as Latinos derived nearly two-thirds of their net worth from home equity before the downturn and “a disproportionate share reside in states that were in the vanguard of the housing meltdown.” Homeowners in California, Florida, Nevada and Arizona were hit particularly hard.

The entire report can be viewed here.

FILED UNDER: Economy, Latino homeowners, Pew Hispanic Center, Pew Research Center, Wealth gap

July 14, 2011 | 8:58 AM | By Leslie Berestein Rojas

Readers on Latinos buying ‘grandma’s house’

Photo by Irina Netchaev/Flickr (Creative Commons)

A post earlier this week highlighted a new USC report on the “housing swap” taking place in California between older white Americans as they sell off their homes in retirement, and the younger Latinos who are entering the market. According to the report, it’s thanks in part to these new homeowners that while California residents 75 and older have been selling their homes in large numbers, the state has seen only a one percent net drop in home ownership rates.

The headline asked the question, “Who will buy grandma’s house?” The reaction from some of the readers posting comments on KPCC’s Facebook page has been interesting.

Marc Ramirez wrote:

Yeah, yeah… coming to your neighborhood!

Jeff Musa didn’t seem to mind that, writing:

Today’s Latinos aren’t any different than yesterday’s Germans or Italians. Families. Values. Upwards. Education. It’s still happening and yeah, there were people scared of the ‘bad’ immigrants 100 years ago too, yelling at them to learn English already. It will be fine folks. Welcome to the neighborhood.

Bob Newman remarked:

The Garcias bought my parents’ house.

For Diane Correa, the report was a bit behind the curve:

Well I guess that’s a good thing since my parents are Latino & have owned their own home 50+ years.

And this from Laura Hessler, speaking for those trying to sell in this tough market:

As long as SOMEONE buys it!

The report was written by Dowell Myers ,a professor and urban growth specialist with the USC School of Policy, Planning, and Development. Myers’ work has often focused on how immigration is transforming Los Angeles and Southern California.

FILED UNDER: Dowell Myers, Latino homeowners, Real estate, University of Southern California, USC

July 12, 2011 | 12:33 PM | By Leslie Berestein Rojas

Who will buy grandma’s house? Likely a Latino family

Photo by Todd Lappin/Flickr (Creative Commons)

Who is going to buy your parents’ or grandparents’ house when they retire and downsize, or move out of state? According to a new study from the University of Southern California, there’s a good chance that the buyers will be Latino.

The report from the USC School of Policy, Planning, and Development breaks down who has been selling homes in California and who has been buying them, using census data to illustrate a housing swap that is taking place between older white Americans and younger Latinos.

According to the report, California residents 75 and older have been selling off their homes in large numbers. In spite of this, the state has only experienced a 1 percent net drop in home ownership rates. Why? Largely because of the number of young Latino homeowners entering the market. From the report:

Older ages are pivotal for homeownership. On one hand, homeownership rates rise to a peak at age 65, but older age groups are about to lose large numbers of homeowners through moves out of state, shifts into renting or assisted living, and other life changes.

Analysis of the new census data shows us that attrition over the 2000s was a loss of 67% from the number of homeowners who had been ages 75 and older in 2000; losses were 26% of the number of homeowners who had been ages 65-74; and losses were nearly 10% among those ages 55-64.

…The cohort sell-off at older ages in the 2000s was not replaced by young cohorts of white home buyers. Young homeowners under age 45 had been a very prominent growth factor in the 1980s, growing by 975,104, but they grew more slowly in the 1990s (678,870) and slower again in the 2000s (543,797). This diminishing growth at young ages is not enough to cover the growing attrition of white homeowners at older ages. As a result, the total number of white non-Hispanic homeowners in California declined by 157,877 in the 2000s.

In contrast, Latino homeowners increased by 383,778 over the decade, accounting for 78.5% of California’s total growth in homeownership. It is young Latino home buyers, and also Asians, who have taken up the slack from diminished white demand. The new homeowners at young ages were 192,284 less than in the decade of the 1990s even though the sell-off by older homeowners was increasing. Latinos contributed 32.4% of the new homeowners at young ages during the 2000s, and they have potential to do much more.

The clear challenge for the future will be how to pick up the growing slack from the increased sell-off of older homeowners. “Who is going to buy your house?” has become an important question for all of us.

The trend of older white Americans selling off their properties is expected to pick up as Baby Boomers age, creating more opportunities for minority home buyers entering the market.

The report was written by USC professor and urban growth specialist Dowell Myers, whose work has often focused on how immigration is transforming Los Angeles and Southern California.