Wednesday, February 11, 2015

According to Zillow Minorities Have a Hard Time Buying a Home

It’s hard to imagine that in today’s modern world such statement could still be true but according to Zillows’ latest study, this is in fact the case. This is the 1st time that the study included data on a metro level and the numbers seem to reveal the fact that white and Asians persons are able to obtain a home loan easier than certain other minorities. The study includes data nationwide and some people feel that  it indicates that there are still access to credit issues that exist for certain ethnic and racial minorities.

In all fairness it must be noted that geographical location and income are also important factors that greatly affect one’s ability to obtain a home mortgage. As an example, the study revealed that black and Hispanic applicants that were denied for a home loan also earned approximately $20,000 less income per year than many of the approved white applicants. It’s also important to understand that many of the homes located in minority areas experienced larger increases in value before the recession and larger reductions in their value during the crash.

An excellent example of this situation can be seen in the city of Los Angeles. In the black and Hispanic areas of the city property values still remain 20+% lower than before the recession but in the predominately Asian and white areas current home values are peaking. Geography and location are always factors when determining the value of a given property and this is one of the reasons for the large disparity seen here.

Nationwide it is also true that many Asian neighborhoods are located on the west coast which has historically higher property values than many of the Hispanic areas which are located in less valuable markets such as Southern and Southwest California and many inner city areas with lower property values. Currently home ownership rates are 71.1% for whites, 57.8% for Asians, 41.9% for blacks and 45.2% for Hispanics.

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