Photo by Todd Lappin/Flickr (Creative Commons)
Who is going to buy your parents' or grandparents' house when they retire and downsize, or move out of state? According to a new study from the University of Southern California, there's a good chance that the buyers will be Latino.
The report from the USC School of Policy, Planning, and Development breaks down who has been selling homes in California and who has been buying them, using census data to illustrate a housing swap that is taking place between older white Americans and younger Latinos.
According to the report, California residents 75 and older have been selling off their homes in large numbers. In spite of this, the state has only experienced a 1 percent net drop in home ownership rates. Why? Largely because of the number of young Latino homeowners entering the market. From the report:
Older ages are pivotal for homeownership. On one hand, homeownership rates rise to a peak at age 65, but older age groups are about to lose large numbers of homeowners through moves out of state, shifts into renting or assisted living, and other life changes.
Analysis of the new census data shows us that attrition over the 2000s was a loss of 67% from the number of homeowners who had been ages 75 and older in 2000; losses were 26% of the number of homeowners who had been ages 65-74; and losses were nearly 10% among those ages 55-64.
...The cohort sell-off at older ages in the 2000s was not replaced by young cohorts of white home buyers. Young homeowners under age 45 had been a very prominent growth factor in the 1980s, growing by 975,104, but they grew more slowly in the 1990s (678,870) and slower again in the 2000s (543,797). This diminishing growth at young ages is not enough to cover the growing attrition of white homeowners at older ages. As a result, the total number of white non-Hispanic homeowners in California declined by 157,877 in the 2000s.
In contrast, Latino homeowners increased by 383,778 over the decade, accounting for 78.5% of California’s total growth in homeownership. It is young Latino home buyers, and also Asians, who have taken up the slack from diminished white demand. The new homeowners at young ages were 192,284 less than in the decade of the 1990s even though the sell-off by older homeowners was increasing. Latinos contributed 32.4% of the new homeowners at young ages during the 2000s, and they have potential to do much more.
The clear challenge for the future will be how to pick up the growing slack from the increased sell-off of older homeowners. “Who is going to buy your house?” has become an important question for all of us.
The trend of older white Americans selling off their properties is expected to pick up as Baby Boomers age, creating more opportunities for minority home buyers entering the market.
The report was written by USC professor and urban growth specialist Dowell Myers, whose work has often focused on how immigration is transforming Los Angeles and Southern California.