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Giving Compass' Take:
• The Aspen Institute explored 100 U.S. cities with the most significant amount of Hispanic households and started mapping the Hispanic homeownership gap within those cities.
• How can funders take action to advocate for more Hispanic homeowners?
• Read about how philanthropists can impact wealth inequality.
Despite improvements in recent years, Hispanic homeownership still significantly lags behind non-Hispanic white homeownership. Homeownership is key for building wealth, and consequently, the homeownership gap between white and Hispanic households has serious implications for the total wealth gap between those groups.
Similar to our prior work mapping the black homeownership gap, we examined the 100 US cities with the largest number of Hispanic households and created a map to show the size of the Hispanic homeownership gap and the scope of the affected population across selected US metropolitan areas.
Our analysis shows that as the Hispanic share of a metropolitan area’s population grows, the size of the homeownership gap tends to decline.
Of the 10 cities with the largest number of Hispanic households, 7 of them— Dallas, Houston, Los Angeles, Phoenix, Riverside, San Antonio, and San Diego—are in the Southwest. The Southwest in general is home to a substantial share of the US Hispanic population. Accordingly, we find that the gap is generally smaller for cities in the Southwest, and the gap is even smaller in many Texas cities.
On the other hand, many Northeastern cities have smaller—though not insubstantial—Hispanic populations. Even Northeastern cities with the largest Hispanic populations have comparatively lower Hispanic shares of their population.
Although the Hispanic homeownership rate has increased steadily over the past five years, considerable barriers remain to achieving equitable access to credit, down payments, and opportunities to build wealth.
Policymakers and participants in the housing arena can support Hispanic homeownership through outreach efforts.
Mortgage financing also does not adequately serve Hispanic borrowers. Hispanic people on average use more cash than credit when making purchases. A lack of credit history precludes those who might otherwise be mortgage-ready from qualifying for a loan.
Thus, reforms in mortgage finance that address creditworthiness determination—such as greater use of rental payments, telecommunication bills, and utilities in credit assessments—can help expand homeownership to Hispanic borrowers and reduce the racial homeownership gap.
Read the full article about Hispanic homeownership gap by Sarah Strochak, Caitlin Young, and Alanna McCargo at Urban Institute.