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Rising Home Prices, Unit Shortages Hurt Latinx Ownership

Updated: Nov 4, 2021

Panel of housing experts at DATOS event.

Latinx buyers expected to be a majority of home buyers in the future but lack of entry-level housing stock and skyrocketing home prices hinder dreams

By Jonathan J. Higuera

Latinx residents make up one-third of Arizona’s 7.4 million population but only 19.5 percent of homeowners, reports data provided by the Arizona Hispanic Chamber of Commerce.

The findings were released during last week’s annual DATOS event, which provides a host of relevant statistics on Latinos in Arizona and throughout the nation.

The low home ownership rate among Latinos is creating a crisis among low- and moderate-income people because rental units are also seeing rapid price increases that are pushing people out of those units.

“We need to rethink our approach to housing in this country,” said Patricia Garcia Duarte, president and CEO of Trellis, a Phoenix-based nonprofit focused on helping people become first-time homeowners. “If housing is a human right, then we need to do more to make sure all people are housed.”

The issue is glaring in metro Phoenix in part because it is one of the fastest growing regions in the country. Yet homebuilders are under no obligation to offer entry-level homes, Duarte noted.

In fact, less than 10 percent of the new housing stock are aimed at entry-level buyers.

"I've been reading about some huge home subdivision projects going up in the far west Valley and I'm wondering how many of those units will be available for entry-level buyers," she said.

Furthermore, state law prevents municipalities from requiring homebuilders to provide inclusionary housing units based on community needs.

Although the situation is tenuous, Latinos are expected to be up to 70 percent of the new homeowners of the future, reported the National Association of Hispanic Realtors.

“The future is bright,” said Duarte. “A lot of millennials are coming of age and have an interest in owning. But many are worried and concerned about the affordability. Wages are not keeping up pace with values in home and rent prices.”

According to the Arizona Regional Multiple Listing Service, the median price of a home in metro Phoenix was $410,000 in September.

“When home prices go up, the gap for someone to afford an entry-level home gets wider,” Duarte said. “If a home now costs $300,000 and they qualify for $200,000 loan, it gets harder for us to layer in programs to help them get in that home.”

Another factor making homes more expensive are the number of institutional investors buying homes. Duarte said one report stated one out of four homes sold were to investors. She cited a Glendale subdivision of single-family homes that are all rentals, with the cheapest one-bedroom still going for $1,500 a month.

“If Latinos are going to be future homeowners, what will they buy,” she said. “We can’t compete with Wall Street."

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