Hispanics are trailing behind whites in homeownership, and they likely won’t catch up until 2035, according to a new
report from Freddie Mac. The Hispanic homeownership rate is 26 percentage points less than the homeownership rate for whites as of 2015. The gap has narrowed slowly over the last 20 years, dropping from 29 percentage points in 1995.
Freddie Mac researchers note that Hispanics and whites are influenced by similar factors when it comes to homeownership, including age, income, and education. Age is the most important factor affecting the homeownership gap, researchers note. An 11-year difference in the average age of whites and Hispanics of Mexican origin “explains almost 7 percentage points of the over 20-point difference,” researchers say. Researchers also report that immigration-specific attributes—national origin, length of U.S. residency, and level of English language skills—accounts for about 6 percentage points of the gap.
In the future, age distribution and resident status will be among the drivers that close the white and Hispanic homeownership gap. The narrowing of the age gap is expected to reduce the homeownership gap by 5.1 percentage points by 2035, researchers say.
“For decades, the homeownership rate of Hispanics has remained more than 20 percentage points below the rate for whites,” says Freddie Mac chief economist Sean Becketti. “This gap has narrowed in the last 25 years, but very slowly. These populations are growing and aging at different rates, with the average age of whites increasing by six years over the next 45 years compared to nearly 10 years for Hispanics. If these Census projections about age distributions are realized, the white/Hispanic homeownership gap is likely to narrow by 20 percent by 2035. In addition, changes in other factors like income and education should further reduce the Hispanic homeownership gap.”
Source: Freddie Mac
