An estimated 2.2 million Hispanic households, most of them of Mexican descent, could become home owners by the end of the decade if real estate and lending professionals reach out to them, according to new research that for the first time delves beyond financial and demographic factors.

The study by the Tomas Rivera Policy Institute, a Latino-centric think tank affiliated with the University of Southern California's highly rated School of Policy, Planning and Development, found that the majority of the nation's fastest growing population want to own the roofs over their heads but don't know how to go about it.

The Latino community is "not a ‘self-editing' population," the report released last week said.

"They are not opting out of the housing market by choice. The majority have expressed a strong desire to buy a home," the report said.

The study of 1,400 renters and recent first-time buyers in the Los Angeles, Houston and Atlanta areas is "quite possibly the most concrete picture every drawn of the potential Latino home owner and the obstacles that stand in the way," said Harry Pachon, president of the Rivera Institute and a professor of public policy at USC.

The study has a heavy emphasis on Mexican-heritage households because Mexico is the most common country of ancestry, accounting for about two-thirds of all Hispanics residing in the United States.

Those of Mexican descent also are among the most disadvantaged within the Latino community, with a level of education that lags all other groups. The proportion of Mexican Americans living in poverty also is greater than that of other Latino groups.

One major source of confusion among the survey participants involves residency status and documentation, according to researchers.

Even though a majority have lived continuously in the United States for more than a decade, many are bewildered about the legal requirements for establishing credit and obtaining financing, and believe they must be either naturalized citizens or legal and permanent residents to buy a house.

Another problem is that many Latinos live a "kind of cash-only existence," the study confirmed..

"Unbanked" households are paid in cash, pay their bills with money orders and cash checks at local supermarkets or fee-based checking cash agencies, and are therefore less likely to move forward in the home buying process than their banked counterparts, the report said.

A third "very real and important barrier" is the lack of information.

"For immigrants who speak little English, it is a daunting task to acquire information and to understanding the complexity of the home buying process," the study said.

"We found that prospective home buyers either have no information, or even worse, misinformation."

The "bright spot" in the study's findings is that participants profess a high level of confidence in "the formal gatekeepers" as resources for information. And that, said Pachon, "opens the door" for real estate professionals to implement outreach programs for potential buyers.

If real estate agencies and lenders follow researchers' recommendations, the report predicted that the ownership rate among Latinos could reach 53 percent by 2010, an increase of 2.2 million households.

As of this year's second quarter, according to the Census Bureau, the ownership rate among Hispanics was 47.4 percent, the lowest of all ethnic groups. By contrast, 49.7 percent of all African American households were owners. And among the population as a whole, the national ownership rate was a record 69.2 percent.

According to the study, only 11 percent of the renters in the three metro areas are actively involved in the home buying process. But 44 percent said they hoped to buy within the next five years.

Only 29 percent have an ownership time-line of more than five years, and just 16 percent said they have no plans whatsoever to buy.

To foster ownership among Latinos, the study calls on realty agencies and lenders to assume a "trusted intermediary" role by becoming part of the Latino community's support system.

To help educate the large and growing Latino market, it recommends the creation of bi-lingual home buying and financial literacy programs and innovative mortgage products that ensure equal access to financing and protect unknowing borrowers from abusive lending practices. And it suggests that builders interested in tapping into the Latino community should focus more on more affordable multi-family residences that are more accessible to lower-income families.

Pachon said civic and business leaders in the Latino community also should be more proactive in helping immigrants on a temporary U.S. visa or undocumented aliens resolve their residency status.

Often a source of "confusion and fear," the report said, this "barrier affects almost every other part of the home-buying process."

Although resolving residency status can only be accomplished by the individual, researchers said, community groups and local leaders could find ways to better inform their constituents about eligibility requirements and the benefits of documentation.

By adopting these and other recommendations, industry professionals and community activists could have a significant impact on all minorities, not just Latinos, because the barriers to home ownership "cut across all national origin groups," the report also said.

Published: August 11, 2004

Use of this article without permission is a violation of federal copyright laws.

When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.