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Financial stress, especially the cost that comes from struggling to afford housing payments, is one of the most toxic people can experience. While the financial crisis of 2008 is over and the economy as a whole has by and large rebounded, Latinos are still reeling from its lingering effects.
More and more Latinos and Latino families are choosing to rent than buy a home. According to research by The Hill, Latino homeownership rates that declined due to the financial crisis are still on the decline.
In 2007, nearly 50% of all Latino households owned their own homes. In 2017, that rate is now 47% and sinking. Research also found that the number of Latino families submitting mortgage applications have plummeted 74% from their peak numbers in 2007.
The much stricter financial regulations that came about as a result of the housing crisis are seen to be part of the reason for the decline in Latino participation in the housing market. The current housing market is also seen as a reason why.
As demand for new homes outpaces the supply, investors have inflated the market to make many formerly affordable homes for Latinos out of reach.
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“Homebuyers are having a tough time competing with investors that are purchasing these properties,” said U.S. Rep. Norma Torres of California in an interview with The Hill. “We need to address the issue of the shortage. We’re not building enough housing. For example, in California there’s a need for an additional 186,000 units, but yet in this next year we will only build about 80,000.”
While the new lending policies, coupled with the high down payment prices, were put in place to prevent the “predatory lending” that in part led to the 2008 crisis, it has often made mortgages unavailable for low-income families.
According to The Hill, the “average” white renter has $4,700 in liquid financial assets; this includes cash, bank accounts, investments, and retirement savings. The average Latino renter has $1,500. The reality of the situation leaves many Latino families with no choice but to rent.
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