Inventory shortage cut growth of Hispanic owner households by 74 percent in 2013
Hispanics have powered more than half of the growth in homeownership in recent years, but a severe shortage of for-sale homes exacerbated by a flood of institutional investors significantly constrained Hispanics’ contribution to homeownership growth in 2013, according to the National Association of Hispanic Real Estate Professionals (NAHREP).
“This is a story of potential,” said Jason Madiedo, president of NAHREP. “Latinos are ready to buy homes now. Their biggest obstacle coming into today’s market isn’t credit – it’s lack of available housing.”
Hispanics accounted for an increase of 2.6 million owned households between 2000 and 2013, or 47 percent of all homeownership growth in the U.S., according to NAHREP’s 2013 State of Hispanic Homeownership Report.
From 2010 to 2013, Hispanics’ share of homeownership growth was even higher, with 56 percent of homeownership growth attributable to Hispanics, the report found.
But Hispanics’ contribution to owner household growth fell precipitously to 84,000 in 2013 from 324,000 in 2012, according to NAHREP CEO Gary Acosta – a 74 percent decline.
The report casts much of the blame for the drop on institutional investors, which the trade organization says have gobbled up affordable housing in many markets with high concentrations of Hispanics. Data on institutional investor and cash sales transactions suggest that the “astounding trend of cash sales has all but eliminated affordable housing inventory” in the nation’s largest Hispanic markets such as Miami, Phoenix, Las Vegas and Atlanta, according to NAHREP.
According to a NAHREP survey, 42 percent of members said the inventory shortage was the No. 1 barrier to homeownership for their clients; and 40 percent of members said they had more than five active clients who haven’t been able to find a suitable home or get an offer accepted.
NAHREP faulted “misguided foreclosure disposition programs that favor cash investors” for helping to fuel investor activity.
“The readiness of this first-time-buyer market represents a whole new purchase cycle that can drive recovery in local communities and put the housing recession behind us once and for all,” Madiedo said.
