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Aspiration to own a home is strong across ethnicities and regions

WASHINGTON – Dec. 17, 2010 – Fannie Mae has released the second installment of its 2010 Own-Rent Analysis: Highlights of the first two themes were announced last week, and Fannie Mae released data that focuses on ethnic groups and homeownership.

According to the study, all racial and ethnic groups polled, as well as immigrants, strongly aspire to own a home despite current disparities in homeownership rates for the groups. Additionally, if personal finances improve for these groups as they continue to grow in number, homeownership rate disparities may not persist.

However, the analysis also found that if homeownership rates by race and ethnicity remained constant at 2009 levels, projected homeownership would decline fairly steadily until 2050.

“Our study gives us reason to believe that the homeownership rates for ethnic groups and immigrants will be higher than indicated solely by the projected growth of the racial and demographic population,” said Doug Duncan, Fannie Mae vice president and chief economist.

On the geographic front, residents of Cleveland, Ohio; Phoenix, Ariz.; and Seattle, Wash., were surveyed to measure attitudes and behavior differences in cities with distinct real estate market characteristics. The analysis found that despite dramatically differing housing markets and percentages of underwater and delinquent mortgage borrowers, residents of all three cities have similar, positive views about the benefits of owning for both financial and lifestyle reasons.

The reports are available on http://www.fanniemae.com/.

Overview of key findings

According to U.S. Census Bureau forecasts, the population is predicted to become more racially and ethnically diverse, and most population growth will come from immigrants and their descendants.

• The U.S. population is projected to grow by nearly 130 million people over the next 40 years. Immigrants and their descendants will drive much of this growth. By 2050, non-Hispanic whites are projected to compose 46 percent of the population compared with 65 percent today.

• Strong homeownership aspirations exist across races, ethnicities, and immigrant groups, indicating that current disparities in homeownership rates may not persist in the future, particularly if personal finances improve.

• For first generation immigrants and minorities, the percentages of survey respondents intending to own a home if they were to move in the future are higher than current ownership rates.

• First generation immigrants and minorities are more likely to be living in multifamily housing and more likely to want to own these units.

• Among all sub-groups surveyed, African Americans are most likely to rent their homes; 52 percent of African Americans, compared to 41 percent of first-generation immigrants, 38 percent of Hispanics and 25 percent of whites.

• If current racial and ethnic homeownership rates remain unchanged, overall homeownership will decrease in the U.S. by four percentage points by 2050, as immigrants and ethnic groups currently have lower homeownership rates than non-immigrants and whites.

Homeownership rates converge regardless of race, ethnicity, and immigration status among people with higher incomes. And for immigrants, homeownership also increases with tenure in the U.S.

• According to U.S. Census Bureau data, among ethnic groups, non-Hispanic whites currently have the highest rate of homeownership at 76 percent, compared to 51 percent for white Hispanics, 47 percents for non-Hispanic blacks, and 34 percent for black Hispanics.

• Among survey respondents, whites have a homeownership rate of 71 percent, compared to 44 percent for blacks and 53 percent for Hispanics. However, for blacks whose annual family income is between $50,000 and $99,000, the ownership rate soars to 60 percent (compared to 79 percent of whites) and for Hispanics, 63 percent.

• Immigrants also tend to have lower homeownership rates but the gap quickly narrows over time as tenure in the U.S. increases. Within 30 years of arrival in the U.S., immigrant homeownership rates catch up with overall average U.S. homeownership rates.

© 2010 Florida Realtors®