WASHINGTON — When it comes to homeownership, Hispanics in New Jersey, single parents in California and senior citizens in Rhode Island all have something in common: More than a third have an unaffordable mortgage.
Inequality in America has traditionally followed familiar patterns of race, age and education. Those long-standing gaps have been magnified by the real-estate boom and now the historic bust, according to an Associated Press analysis of 2007 Census Bureau data.
While minorities have made significant gains in wealth and homeownership since 1990, “things are going into reverse gear,” and now the homeownership rate for blacks and Hispanics is falling, said Edward Wolff, a New York University economist who studies income and wealth distribution.
Nearly 9.5 million households, or nearly one of every five of the nearly 52 million home owners with a mortgage, spend 38 percent or more of their pretax income on their mortgage payment, property taxes and insurance, AP’s analysis found. That’s the threshold to qualify for the loan-assistance program launched last month by Fannie Mae and Freddie Mac, the mortgage-finance companies now under government control.
Not surprisingly, the most financially burdened are in California, Florida, Nevada and the Northeast, areas hardest hit by soaring home prices.
Yet in every state, there are many pockets of homeowners who are just one unexpected medical bill or car repair from falling behind. A record 10 percent of U.S. homeowners with a mortgage are at least one payment behind or were in foreclosure as of last fall, compared with 7.5 percent a year earlier and just under 6 percent in 2006.
The burden is clearly more arduous among minority households, the AP analysis found. Just less than a third of Hispanic homeowners spend at least 38 percent of their income on housing expenses, compared with about a quarter of Asian and black households and nearly 16 percent of white households.
Out of work for more than a year after contracting a rare disease caused by an airborne fungus, Joel Cazares, 36, of Visalia, Calif., brings in $550 every two weeks in disability payments. His wife, Maria, 34, makes about that much weekly as a hairstylist. The couple, who have three kids, haven’t made their $2,500 home-loan payment in four months.
“Our money’s like a piece of gum,” Joel Cazares said. “We’re making it stretch as far and as long as we can.”
Nearly one in three of those without a high school or college diploma spend at least 38 percent of their income on housing, compared with 12 percent of those with advanced degrees, the AP analysis found.
Washington is abuzz with talk of new efforts to stabilize the housing market and stop the free fall in home prices. President-elect Barack Obama has pledged to direct up to $100 billion in financial-bailout money toward a sweeping effort to prevent foreclosures.
