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High Hurdles Face Minority Home Buyers in Texas

AUSTIN – (By Dale King) – Affordability and a lack of financing pose hurdles for minorities and the diverse Texas population that seek to buy homes in the Lone Star State, says a new report by the Texas Association of Realtors.

The report shows growing diversity in household composition and ethnicity among homeowners in Texas. But the TAR’s 20-page “Texas Homebuyers and Sellers Report” also cites an increase in home affordability challenges forcing would-be buyers to postpone the purchase of a family domicile.

Vicki Fullerton

“The profile of Texas homebuyers is as diverse as the state itself, continually broadening as the demand for Texas real estate grows,” said Vicki Fullerton, chairman of the Texas Association of Realtors. “At the same time,” she said, “rising home prices, lower household incomes and tight lending standards are making it increasingly difficult for some Texans to afford a home.”

The 2017 report from the TAR says it illustrates the growing affordability challenges across the state. Median household income among Texas homebuyers declined nearly 3% year-over-year to $94,200. The median price paid by Texas homebuyers was $215,000, significantly higher than the Real Estate Center at Texas A&M University’s estimate of $150,000 as a typical home price for entry-level and first-time homebuyers.

The greatest hurdle for expanding home ownership in minority communities may be the lack of credit.

Shad Bogany

“In my opinion, in the African-American community, the most difficult challenges are lack of credit, lack of income and lack of savings,” said said Shad Bogany, a Realtor with Better Homes and Gardens Real Estate Gary Greene and former chairman of the Houston Association of Realtors and the Texas Association of Realtors. For years, Bogany hosted the “Real Estate Corner” call-in radio show on KCOH, a historically black radio station.

The longtime realty broker said potential homebuyers can find “lots of down-payment assistance programs.” Some communities have a number of them, he said, though Houston is on the low end of that scale.

Bogany said the lack of credit is the “biggest problem” for African-Americans looking to purchase a home.

Coming up with a down payment combined with taxes and insurance creates a triple-threat for some folks who want to buy homes — particularly those strapped with other bills and a paycheck that barely covers current expenses, said Bogany, who was appointed to the board of the Texas Department of Housing and Community Affairs in 2001.

“It used to be that someone could come in to the office with $1,500 dollars and I could do something for them,” the veteran Realtor said. But those days, he noted, have gone.

Debt is a serious drag on many Texans looking to buy homes – and it seems to be worsening, says the report. Debt delayed Texans from saving for or purchasing a home for a median of three years. Some 44% of Texas homebuyers waited six to 12 months to save for a down payment, compared to only 10 percent of homebuyers in the 2016 report.

“As obstacles to purchasing a home increase, soaring property taxes due to a lack of accountability when tax rates are set at the local level have made it difficult for Texans to continue to afford that home,” said Fullerton. “The Texas Association of Realtors supports Senate Bill 2 and House Bill 15 to bring honesty and transparency to the property tax rate-setting process and facilitate property owner engagement in that process.”

Indicating that Texans are buying later and moving earlier in life, the TAR report says the median age of first-time buyers increased three years to 35 while the median age of Texas home sellers decreased eight years to 46.

The report also showed a broader ethnic diversity in the pool of Texas home purchasers. Among all Texas homebuyers, 14% identified as Hispanic, 6% identified as African-American and 4% identified as Asian.

The study also states that minorities among first-time homebuyers were most likely to be Hispanic (27%) while minorities among repeat buyers were most likely to be African-American, who tallied 27% in that category. Bogany and Fullerton agreed on the latter figure.

The number of single female homebuyers increased 5 percentage points to 19% and the figure for single male buyers rose 2 percentage points to 9%.

Other data in the report:

  • Among married couples, 85% identified as White/Caucasian, 13% identified as Hispanic/Latino, 6% identified as African-American and 4% identified as Asian.
  • More homebuyers live with family and/or friends prior to owning a home in Texas (36%) compared to homebuyers nationally (11%).
  • The opposite is true for homeowners who rented an apartment prior to owning their home. Nationally, more homeowners rented an apartment or house as a prior living arrangement (41%) compared to Texas homeowners (13%).

Data for the 2017 edition of the Texas Homebuyers and Sellers Report was derived from the 2016 Profile of Homebuyers and Sellers Texas Report by the National Association of Realtors, which analyzes survey data among Texans who bought or sold a home between July 2015 and June 2016.

May 12, 2017 Realty News Report Copyright 2017

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