In recent months, we’ve seeing encouraging reports about the real estate market and an overall decline in nationwide foreclosures. Although it might be tougher to find a property to buy in the current climate, home prices are finally on the rise and banks even seem to be turning better profits. According to a recent article in the Chicago Tribune, Hispanic consumers are at the forefront of new homeownership. The National Association of Hispanic Real Estate Professionals (NAHREP) agrees, reporting that “Latino potential first-time buyers have increased 38 percent since 2010.” In fact, the NAHREP publishes an annual report on the state of Hispanic homeownership, and the most recent report contends that the Hispanic homebuyer market “is poised, due to its population size, high desire, and buying clout, to drive first-time homebuyer purchases and accelerate the nation’s economic recovery.”
However, the article suggests that these first-time buyers could be “stymied by a shortage of homes to buy and by competition from deep-pocketed investors.” These potential limitations are echoed through an article in the Huffington Post last month, which voiced concerns about Hispanic homeownership being threatened by unfair housing practices.
Limiting Factors in Hispanic Homeownership
Perhaps if we know what’s limiting this budding market base, we might have a better idea of how to advance Hispanic homeownership in the Chicago area.
The Chicago Tribune alludes to the problem of a lack of inventory. There are fewer houses on the market, and they have high price tags. These factors can lead potential homeowners to make multiple offers on properties, and to be continuously outbid by others who are willing to bid even higher than the stated value of the property. After months of this type of bidding, many first-time homeowners grow discouraged, and many stop bidding.
Often, individuals and families lose out to deep-pocket investors who can pay cash and closing costs up front. The Huffington Post explains that “they get beat up by cash buyers and pool investors who offer a fast closing even at lower prices.” This hurts many first-time Hispanic homebuyers, who often have to wait up to 60 days to close on their contracts based on the terms of loans backed by the Federal Housing Administration (FHA).
The NAHREP, despite its encouraging statements, has suggested that banks have also been more willing to offer low prices on foreclosure properties to cash buyers, which ends up hurting these individual homebuyers. In many ways, the NAHREP suggests that “townships and municipalities can do their fare share” to ensure that foreclosures and other for-sale properties are in move-in condition. In addition, they encourage banks to entertain serious offers from individual homeowners.
In brief, the organization would like to see a focus on getting owner-occupants into foreclosures and other vacant homes, and it would like banks to move away from policies that “favor large investors.”
Encouraging Facts and Statistics for Hispanic Homebuyers
Gary Acosta, the co-founder and executive director of the NAHREP, said that despite the obstacles Hispanic homeowners face, they “seem to be very resilient, especially coming off the housing crisis.” He indicates that Hispanic Americans are “forming households at a faster rate than the general population,” which is an arrangement that is “much more aligned with the purchase of a home.”
Acosta explains that there are some “nuances to working with the Hispanic market,” including language barriers and limited credit histories in certain cases. Yet, he’s optimistic. The Chicago Tribune quoted him as saying that “the major players in housing now understand, or are starting to understand, how important the Latino market is.”
If you have questions about homeownership or current terms surrounding mortgages and foreclosures in Illinois, contact an experienced attorney today to discuss your concerns.
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