As the buying power of the Latino community gains momentum across the country, Department of Housing and Urban Development Secretary Shaun Donovan recently said this demographic has the most to gain from the housing market and economic recovery.
In the wake of the housing market collapse, fewer communities were impacted as significantly as Latinos. Between 2005 and 2009, the median wealth of Latinos plummeted 66 percent, according to Census Bureau data.
Meanwhile, during the same period, Latinos saw their home prices fall from a median price of $100,000 to $49,145. It's believed this occurred because major populations of Latinos can be found in Arizona, California, Florida and Nevada. These states have maintained some of the highest rates of mortgage default and foreclosure in recent years.
Additionally, the homeownership rate among Latinos trended lower between 2001 and 2011. In 2001 the rate stood at a 47.3 percent of all households, while in 2011, the rate fell to 46.9 percent. However, despite the decline, the negative change in Latino homeownership was fell less significant than the national homeownership rate falling from 67.8 percent to 66.1 percent during the same period.
"That's an absolute tragedy. Completely unacceptable," Donovan said in regard to the high level of negative equity among the demographic, according to HousingWire.
However, the Mortgage Bankers Association recently reported in its Weekly Application Survey that the rate of refinancing in these troubled states surged in February on a monthly basis. Real estate data from the survey revealed that Nevada led the way with a 71 percent spike in refinancing, while Florida and Arizona saw the rate increase 49 and 61 percent, respectively.
"The states that I started referring to years ago as the sand states that had the worst delinquencies we now should start calling the HARP states for mortgage refinances," said MBA senior vice president of research and education. "We saw big state-level differences in refinance applications for February over January."
During the past decade, Latinos have seen their buying power surge 52 percent. Industry experts say this indicator will undoubtedly result in the demographic becoming a major buying power in the housing market for years to come, as their buying power is forecast to rise another 48 percent by 2016 to an estimated $1.6 trillion.