SEATTLE, WA — Recent research from Zillow reveals encouraging progress in closing the home value gap between Hispanic and non-Hispanic white homeowners. As of now, homes owned by Hispanic individuals are valued 11.9% less than those owned by non-Hispanic whites. This marks a slight improvement from last year’s 12.1% gap and a notable recovery from the 12.4% high observed in December 2021. The gap reflects a significant reduction from its peak of 18% in 2012, following the global financial crisis, which disproportionately impacted minority communities.
Treh Manhertz, a senior economic research scientist at Zillow, emphasizes that homeownership is crucial for wealth building but acknowledges the systemic barriers that have hindered equitable home value appreciation for people of color. He highlights “Efforts to improve access to down payment assistance, credit-building programs, zoning reforms, and affordable housing construction and preservation in desirable areas are key initiatives to help this progress continue.”
Hispanic homeowners often have more of their wealth tied to their primary residences, making them particularly vulnerable to home value fluctuations. Encouragingly, more than two-thirds of the 100 largest U.S. metro areas have seen the home value gap narrow over the past year. Significant strides were noted in Florida markets, such as Miami, Orlando, and Tampa.
Despite these gains, the transition to homeownership remains challenging for Hispanics. They represent 18% of prospective buyers but only 13% of successful homebuyers, according to Zillow’s 2024 Consumer Housing Trends Report. Challenges include higher average home purchase fees—$2,812 compared to the national average of $2,072—and higher mortgage denial rates. Hispanic borrowers face an 18.8% denial rate, often due to higher debt-to-income ratios, compared to 10% for non-Hispanic whites.
Zillow’s research also indicates a slight narrowing of the home value gap for Black homeowners, now at 17.7%, down from 17.9% the previous year. However, this gap remains wider than in mid-2022 and mid-2007, highlighting ongoing disparities that need attention.
Zillow’s analysis employs aggregated small-area home values, weighted by homeowner demographics from the American Community Survey, to provide insights into relative home values and appreciation trends by race. The findings underscore the importance of continued efforts to achieve equity in homeownership and the significant role policy interventions can play in fostering inclusive growth.
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