RALEIGH, N.C. – North Carolina’s 800,000 Latinos represent the fastest-growing segment of the population and a significant potential market for the housing industry, researchers at the University of North Carolina at Chapel Hill report in a new study that was commissioned by Latino Community Credit Union.
That study, “The State of Latino Housing in North Carolina 2015,” found a range of obstacles inhibit homeowner and renter markets from growing. Given the state’s aging native-born population, the much-younger Latino population (50% are under age 25) will play a major social and economic role in coming decades, the study suggests.
“Thus, it is a strategic imperative to ensure that Latinos are fully integrated into the mainstream of the North Carolina economy, housing market and society more generally,” researchers Roberto G. Quercia, James H. Johnson Jr. and Mark McDaniel said in the report.
Latino Community Development Center and Latino Community Credit Union said they commissioned the study to better understand the housing needs of the state’s Latino population, barriers they face in securing housing and market potential they represent.
“It is clear from this study that all of us working in the housing sector need to find ways to expand affordable housing options, both single-family homes and rentals, do a better job of educating and connecting Latinos with information and resources, and train industry players on how they can better tap and serve this market,” said LCCU CEO Luis Pastor in a statement.
The study finds that Latinos are more likely to rent (57%) compared to all N.C. households (33%). Half of all Latino renters and 37% of Latino homeowners are cost-burdened, spending more than 30% of their income on housing. Rents and security deposits are especially high for larger Latino families that need larger units.
On the home-buying front, recession brings sharper declines in mortgage applications and greater loan denial rates for Latinos compared to N.C. households overall. For instance, Latino applications for site-built homes fell 68% in 2011-13 compared to 52% for all households. Denial rates for Latino home loan applications were 19% in 2011-2013 compared to 14% for N.C. households overall.
“Latino households also rely more on subprime, Federal Housing Administration and Veterans Administration loans than the market as a whole,” the study found.
The researchers said they found that Latinos lack knowledge about their rights to home buying, ways to build and repair credit and ways to acquire a mortgage loan.
The study recommends that housing and community advocates collaborate to develop and implement an action plan for providing better information to Latinos, correct misperceptions and address barriers.
Policy actions, such as expanding the federal Low Income Housing Tax Credit and fully funding the National Housing Trust Fund, could add to the supply of affordable housing, according to the study. Increasing funding for the Housing Voucher Choice Program would enable more Latinos to afford quality rental housing, it added.
North Carolina State Employees’ Credit Union, a key player in founding LCCU and an ongoing partner with LCCU in working to serve North Carolina’s Latino community, along with the Z. Smith Reynolds Foundation, and Square 1 Bank, a division of Pacific Western Bank, provided additional funding for the study.
A 26-member advisory committee that included housing industry experts informed the development of the study.
The study may be found online by clicking here.
Latino CDC is a nonprofit organization that promotes financial literacy, affordable housing and economic development for low-income Latino and other immigrant communities in North Carolina. LCCU, founded in 2000, is a national model credit union and community development financial institution that offers a full package of ethical, bilingual financial services, better credit options and financial education. LCCU’s primary mission is to integrate newcomers and the underserved into the U.S. financial system, providing economic opportunity for all. For more information, visit www.latinoccu.org.