In Texas, Minorities Less Likely to Own Homes

While minorities occupy about half of the state’s housing units, they are less likely than white Texans to own their homes, and the state’s largest metro areas have some of the most substantial racial disparities among homeowners, according to recently released U.S. Census data.

A shortage of affordable housing, credit problems and lack of savings for down payments are among the main barriers blamed for creating the demographic divide. 

Hispanics live in 30.6 percent of the state's housing units, but only 27.7 percent of Hispanic households own their home, according to the data. Black Texans occupy 12.5 percent of housing units, but 8.3 percent of black households own their home. 

Meanwhile, white Texans occupy 51.5 percent of housing units, but 58.8 percent of white households are owned. 

Some of the disparities can be attributed to age. The white population in Texas is substantially older than the Hispanic population, so Hispanics have had less time to save money to purchase a home, said state demographer Lloyd Potter.

But the gaps are mostly rooted in varying education and income levels among minority populations. Put simply, minorities are less likely to be able to afford their own homes.

“The essence of it, which probably comes as no surprise, is that it’s largely a function of socioeconomic status, driven by education and then income,” Potter said.

Hispanic and black Texans are underrepresented among Texas homeowners in almost all of the state’s metropolitan areas.

Hispanics face the largest disparity in the Victoria and College Station metro areas. In Victoria, Hispanics occupy 36.7 percent of housing units, but their home ownership rate is only 28.5 percent. In College Station, they reside in 19.1 percent of homes, but only 12.9 percent own the homes.

Black Texans are most underrepresented among homeowners in Texarkana, where they occupy a quarter of homes but their home ownership rate is only 16.8 percent. That’s followed by Waco, where blacks live in 15.8 percent of homes but have a home ownership rate of 7.4 percent.

Behind those numbers are stories of minorities in Texas struggling with inadequate credit scores, the inability to save up for a down payment and exhaustive searches for affordable housing, according to professionals within the housing community.

“The No. 1 thing continues to be, regardless of the demographics, having enough money saved for the down payment,” said Janie Taylor, manager of communications and development for the Texas State Affordable Housing Corporation.

Created by the Texas Legislature, the nonprofit housing corporation offers down payment grants for low-income families across the state. In 2014, about 60 percent of about 1,000 families who benefitted from the program were minorities. 

Minorities looking to become homeowners also face cultural differences and a “lack of familiarity” with the financial system behind buying a home, from building a credit to applying for a loan, said Marisa Calderon, executive director of the National Association of Hispanic Real Estate Professionals.

“There’s that cultural desire to be able to be a homeowner — the comfort and success associated with being able to have a home of one’s own — that exists to a greater degree with folks that are immigrants,” Calderon said. But minorities, particularly Hispanics, also tend to be long-term renters whose monthly payments do not help them build an adequate credit history to qualify for home loans, she said.

With a booming population and housing market, finding an affordable home is a growing challenge. And areas like Austin, Dallas and Midland — where large minority populations reside — tend to be the most expensive places to live.

Wichita Falls is the most affordable area of the state, according to a Texas housing affordability index produced by Texas A&M University’s Real Estate Center. The area has one of the smallest homeownership rate disparities among Hispanic residents, but Hispanics also make up a small portion of its population.

Meanwhile, predominantly-Hispanic Laredo and Austin, where Hispanic residents make up 35 percent of the population, are home to the most expensive housing markets in the state.