By Leticia Miranda – NBC News
After more than 10 years of saving, Joanna Flores finally had enough to make a down payment on her first home. Flores, a 35-year-old computer scientist and single mother of two in Fresno, California, acknowledges that living with her parents saved her a few hundred dollars whenever she could.
“There were many times when I wanted to give up“He tells NBC News.” Just knowing that in the long run I was saving money pushed me to keep going, “he adds.
Although he contributed to the expenses of his parents’ house and the mortgage, for the most part he focused on saving and building his credit. Last year, he won an offer for a three-bedroom home for $ 245,000 and got a first-time loan to buy it.
To do this, he used his $ 3,000 savings and $ 3,000 from his pandemic stimulus to make the down payment. “It’s something I wanted for my children. I wanted them to have a place of their own and a place that they could call home,” he explains.
After losing 66% of their family wealth during the Great Recession, Latino homeowners like Flores are now showing record growth.
[Los latinos serán el 70% de los nuevos propietarios de vivienda entre 2020 y 2040, según estudio]
The number of Latino-owned homes has increased consecutively in the past 6 years, according to a 2020 report from the National Association of Hispanic Real Estate Professionals, a trade group.
Latinos are the only demographic in the United States that has increased its homeownership rate and expected to go from 49% to 51% between 2020 and 2040as reported this year by the nonprofit public policy research organization Urban Institute. The level for all other racial groups, including whites, is expected to decline, according to the report.
“Latinos have an additional bias toward real estate as a means of building assets,” says Noerena Limón, executive vice president for public policy for the National Association of Hispanic Real Estate Professionals, or NAHREP. “Since home ownership makes up such a large percentage of wealth, Latinos will be an integral part of driving home ownership growth for decades to come“, he concludes.
The Latino property boom is helping fuel growth in the overall economy. The National Association of Home Builders estimates that housing represents between 15% and 18% of the Gross Domestic Product (GDP) of the United States.
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In 2019, Latinos contributed $ 423 billion to GDP through the housing market alone, according to NAHREP. The total GDP of Latinos in the United States amounted to $ 2.7 trillion in 2019, more than the GDP of countries such as Italy, Brazil and Canada, according to a report released Wednesday by the nonprofit data research organization Latino Donor. Collaborative.
Limón says there will be “a seismic rise in wealth because Latinos play a huge role in driving wealth, given the appreciation of house prices in the last year and how people build equity in their homes.”
Home prices across the country have skyrocketed during the pandemic. The median price was up 19.7% in July compared to the same period last year, according to the latest data from the S&P CoreLogic Case-Shiller US National Home Price NSA index.
Latinos are much younger than other racial groups in the country. That means there is a larger segment of people in their prime to buy a home, says Jun Zhu, a visiting assistant professor in the finance department at Indiana University-Bloomington and a nonresident fellow at the Urban Institute.
Nearly one in three Latinos is between the ages of 25 and 44, the age at which a home is traditionally purchased, according to the Census Bureau. In addition, they are buying houses at a rate similar to that of past generations, Zhu said.
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Nevertheless, Latinos face structural challenges in buying a home compared to white and Asian populations. For example, their parents have less wealth, credit scores are lower, debt-to-income ratios are high, and there is a higher proportion of self-employed workers, which slows down the homeownership rate, Zhu stresses. .
These barriers have only increased over the course of the pandemic, creating the most restrictive climate of access to credit in the last six years, according to the Mortgage Credit Availability Index of the Association of Mortgage Bankers.
Access to credit has tightened in the past two years as lenders manage a flood of new borrowers, prioritizing premium applicants, while delinquency rates remain higher than pre-pandemic rates. according to NAHREP.
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