Business

Fannie Mae report: Young Blacks, Latinos lead in home rate

WASHINGTON, DC – The rate of homeownership increased at a faster pace among African Americans and Latinos than among Whites in the two age categories most commonly associated with first-time home buying according to research results released recently by the Fannie Mae Foundation. WASHINGTON, DC – The rate of homeownership increased at a faster pace among African Americans and Latinos than among Whites in the two age categories most commonly associated with first-time home buying according to research results released recently by the Fannie Mae Foundation. An analysis of recent data from the U.S. Census Bureau shows that homeownership rates for both African Americans and Latinos aged 25 to 34 increased by four percentage points in the 1990s, substantially more than the 1.9 percentage point gain experienced by Whites in the same age group.

Among household’s aged 35 to 44, the Latino homeownership rate rose 3.2 percentage points and the African American rate rose 1.5 percentage points, while the rate for Whites rose 1.4 percentage points. Despite these gains, however, homeownership rates for African Americans and Latinos aged 35 to 44 remained 20 percentage points or more below the rates for Whites.

The analysis, conducted for the Fannie Mae Foundation by Dowell Myers and Gary Painter of the University of Southern California, also shows that the homeownership rate for younger African Americans and Latinos dramatically outpaced gains for all households. The homeownership rate gain was 0.3 percentage points for all households aged 25 to 34 and flat for all households aged 35 to 44.

"While previous analysis has noted a reversal in the national homeownership trend among younger adults during the 1990s, this important study highlights the rate of growth among younger minority homebuyers, who experienced the most severe homeownership declines during the 1980s," said Stacey D. Stewart, president and CEO of the Fannie Mae Foundation.

"What’s critical to remember, though, is that even with these significant gains, the rate of homeownership among African Americans and Latinos, in the age groups most associated with first-time home-buying trails that of Whites in the same age category by at least 20 percentage points," Stewart added.

The research reveals that homeownership rate increases among younger African Americans were more widespread than among the younger population at large. Homeownership rates for African Americans aged 25 to 34 increased in 43 states, 11 more states than for all 25- to 34-year-olds. Among African Americans aged 35 to 44, homeownership rates increased in 25 states, four more states than for all 35- to 44-year-olds. The breadth of homeownership gains among younger Latinos roughly equaled those for the younger population at large.

"Even though the prospects for homeownership attainment have generally improved for young minority households, it appears their chances are markedly better in some metropolitan areas than others," said Dowell Myers, professor of Urban Planning and Demography at the University of Southern California and co-author of the report.

Other key findings of the research include:

oHomeownership rate gains among young minorities during the 1990s tended to occur in metropolitan areas with larger minority populations.

oIncreases in the homeownership rate (the percent of households that own their own homes) among young African Americans and Latinos were most likely to occur in metropolitan areas where their total populations were largest. The positive relationship between the size of an area’s minority population and gains in homeownership rates likely reflects a combination of factors that could inform future efforts to increase homeownership rates among young minorities.

oIn the nation’s 100 largest metropolitan areas, homeownership rate gains in the age category 35 to 44 varied widely.

oDuring the 1990s, homeownership rates for households aged 35 to 44 increased in 55 of the 100 largest metropolitan areas. Among African American households in this age group, increases occurred in 50 m

December 3, 2003
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