Education, Employment Gains Help More Latinos Become Homeowners

The homeownership rate among Southern California Latinos rose sharply over the last decade, the result of an increase in the numbers of Latino young adults, steady gains in education and employment opportunities, and the availability of innovative mortgage products.

The number of Latinos who own homes in five Southland counties surged 51.4% from 431,101 in 1990 to 652,512 in the last decade, according to the latest Census Bureau figures. Latinos make up about 28% of the region’s 2.3 million homeowners, up from roughly 20% a decade ago.

Nationwide, the Latino homeownership rate has climbed over the last decade to the highest level ever--about 46%--although the rate declined in some states in the South that experienced a large influx of low-wage Latino workers during the 1990s. The national figure still trails the homeownership rate among whites, which was about 74% in 2000. Ten years ago, the national rate of homeownership among Latinos was 41.2%.

The latest census information, which includes homeownership rates in individual census tracts, reveals a nuanced picture of Latino home-buying trends.

Latino immigrants in Southern California typically rent in the urban core for 10 to 20 years, then disperse to the suburbs, often to areas largely inhabited by whites. That differs from the assimilation patterns of African Americans and Asian Americans, who have tended to concentrate their home buying in areas closer to neighborhoods where minorities have established a foothold.

The surge in Latino homeownership over the last decade reflects the burgeoning population of second-generation U.S. residents, whose age range, 25 to 34, puts them in the prime years for home buying. The vast majority of those buyers are first-timers who, despite earning less than non-Latinos of comparable education and lacking accumulated wealth from their parents, are still embracing homeownership in record numbers, according to housing experts.

“Hispanics are very resourceful in their ability to buy homes,” said Gary Acosta, chief executive of the National Assn. of Hispanic Real Estate Professionals. “Many times two families will pool their resources to buy a home, which you don’t see as often with non-Latino buyers.”

Inland Empire Has the Largest Growth

The increase in Latino and other entry-level buyers has played a significant role in driving up overall home prices in the region, said John Karevoll, an analyst with DataQuick Information Systems. As those buyers entered the market, pressure has been applied up the home-buying ladder, where the housing stock is less plentiful.

Among five Southland counties, San Bernardino and Riverside saw the largest gain in the Latino share of homeownership during the 1990s, with increases of 55.4% and 49.7% respectively, according to census figures.

Orange, Los Angeles and Ventura counties also saw significant gains, but not nearly at the soaring pace of the Inland Empire. Orange County experienced a rise of 38.5% in the percentage of Latinos owning homes, while Los Angeles County levels rose 33% and Ventura County’s 30.2%.

Traditionally, Latinos have bought in Los Angeles County cities such as Montebello, Hacienda Heights and Pico Rivera. Those cities saw only modest gains in the Latino homeownership rate in the last decade, however, with an increase of 9.5% in Pico Rivera, 14.5% in Montebello and 29.7% in Hacienda Heights.

Other Los Angeles County cities, however, saw greater increases. Latino homeownership in Bellflower, for example, grew 113% over the last decade; Downey by 104%; Long Beach by 99%; and Lancaster, 85%.

The move to find homes outside the county is fueled by all the expected reasons to seek housing in suburbs.

“They want to buy here because homes in L.A. are too expensive, and they’re ugly and small in the lower price range,” said Haydee Borda, a real estate agent with Sierra Realty in Fontana. “They don’t mind driving to L.A. if they can get a nice house out here.”

That was the case for Mia and Santi Quintes, a married couple who pulled up stakes in Covina nearly four years ago to buy their first home in Fontana, a city at the center of the Latino homeownership explosion.

In 1990, Fontana’s population was 87,535, 36% of whom were Latino. By 2000, the population had jumped 47.3% to 128,929, with Latinos comprising 57.7% of the residents. Latino-owned businesses, such as realty offices, warehouses, markets and manufacturing companies, line the main boulevards today.

The share of Fontana’s homeownership made up by Latinos grew 73% over the last decade, while the share of non-Latinos fell 45%.

Affordability, Business Climate Attract Buyers

The Quinteses, who own a bookkeeping business, were among those attracted to the city’s blossoming business climate and affordable home prices.

After paying $1,000 a month for a small apartment for four years, the couple chose the San Bernardino County city because they could buy a three-bedroom home for $135,000, with only 3% down. They commuted to Los Angeles for the first year, then moved their business to Rancho Cucamonga, a 15-minute commute from Fontana.

“We looked at homes in Baldwin Park and Covina in the $200,000 range, which we really couldn’t afford, and they were falling apart,” Mia Quintes said. “We found better employment opportunities in San Bernardino County, and the quality of life is better there.”

Despite the Latino buying boom in the Inland Empire, many home buyers are still planting roots closer to Los Angeles’ urban core. Alfredo Martinez, 27, an electrician, and his wife Sonia, 25, a hospital worker, just bought a four-bedroom home in Highland Park for $195,000.

The El Salvador natives, who rented an apartment in the same area for several years, saved $6,000 toward a down payment. They say they didn’t mind paying more for a city home that allows them to live closer to their jobs and extended family.

“There was no way I was going to commute from San Bernardino,” Sonia Martinez said. “We plan to stay here a long time. We want our kids to grow up here.”

Economic and educational strides among Latinos have significantly improved their home-buying opportunities, experts say, but other factors also have contributed to the gains.

The Community Reinvestment Act of 1977, which wasn’t fully implemented until the 1990s, requires financial institutions to channel money back into communities where they operate, including neighborhoods housing minorities and low-income families.

Freddie Mac and Fannie Mae, the nation’s largest providers of mortgage money, have increased their purchases of mortgages for low- and medium-income buyers and have implemented outreach programs for minority markets. Lenders have also begun to offer products with flexible terms that expedite the homeownership process.

Trouble Qualifying for Home Loans

Latinos often have no established credit records, and it is not uncommon for them to be self-employed, making qualifying for home loans difficult.

Differences in education and wealth, cultural and language barriers, and lingering discrimination in the banking system also have prevented Latinos from buying homes.

Despite the increases, the difference between the homeownership rates of Latinos and whites is still about 25 percentage points. According to Acosta of the Hispanic real estate group, the fact that Latino income and education levels remain lower than whites explains only part of that gap.

“There’s an issue of minority markets being underserved,” Acosta said. “We need to focus more on that.”