Affordability crisis hits state's Latinos hard, study says
California's shortfall in housing stock and the resulting affordability crisis are especially hard on Latino families, according to a new study by the Tomas Rivera Policy Institute.
Only 29% of Latino households could afford a median-priced home of $217,510 in California in 1999, compared with 37% for all households in the state during the same period. The affordability rate was 34% for African Americans; 55% for Asian Americans and 49% for whites. The national affordability rate was 55%.
In the Los Angeles area, where nearly 40% of all Latinos in the state live, and in other urban markets, housing prices have been rising faster than incomes, particularly for Latino families, the study said. Based on 1999 data, even a 5% increase in the median home price of a detached single-family home can lock as many as 44,833 California Latino households out of the market.
The study includes policy recommendations to help address housing needs for the projected growth of the state's Latino population, which is estimated at an additional 7.2 million individuals by 2020.
Flood insurance program restored
In addition to working quickly in the new year to restore unemployment benefits, Congress also restored the federal flood hazard insurance program.
The lame-duck Congress had placed an estimated 400,000 American homeowners and buyers into potential jeopardy by leaving for the holidays without reauthorizing the $623-billion program for 2003.
On Monday, President Bush signed the one-year reauthorization bill, which had been passed a week earlier by the House and Senate. The reauthorization is retroactive to Dec. 31, 2002.
The Federal Emergency Management Agency, which manages the National Flood Insurance Program, said that insurance companies should proceed without delay in processing any claims held up because of the lapse in authorization and resume processing all flood insurance applications, renewals and requests for increased coverage received during the hiatus.
Signs of softening national market
Mortgage Guaranty Insurance Corp. reported its national market trends index fell to 6.7 in the fourth quarter of 2002, from 6.9 in the third quarter and 6.92 a year earlier, reflecting sluggish economic conditions nationally.
Single-family housing markets remained stable nationwide despite the decline. But more areas of the country showed some softening and reduced appreciation rates.
The index, a barometer of single-family real estate market conditions, averaged 6.82 for the year, the lowest annual average since 1995 when the reading was 6.71. The quarterly index has been steadily trending lower since reaching an all-time high of 7.75 in the fourth quarter of 1999. "Overall, we are seeing changes in the housing markets as the rate of home price appreciation slows," said Neil Siegel, senior market analyst. "If there is any segment where some softness is evident, it is in the market for higher-priced homes."
In the fourth quarter, San Francisco was downgraded from "stable" to "soft." San Jose was rated "weak." Riverside, San Bernardino and San Diego were listed as "strong."