Sales of homes minority-driven

The regional buying boom of 2005 was led by blacks, Asians and Hispanics, data suggest

September 29, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN REPORTER

All the growth in home sales in the Baltimore region last year - the last hurrah of the housing boom - was driven by minority buyers, new numbers suggest.

Mortgage loans to minorities rose nearly 25 percent in 2005 compared with the year before, while loans to whites dropped about 3 percent, according to a report released yesterday by Genworth Mortgage Insurance Corp. and Compliance Technologies Inc. It uses the most recent Home Mortgage Disclosure Act statistics for first lien home-purchase loans - not refinancing or second mortgages.

The region's increase in loans to minority buyers ranked it sixth among the country's largest metro areas. But the boost in homebuying among minority groups played out nationwide last year, in regions big and small.

Across all metro areas, mortgages to blacks, Asians, Hispanics and other minorities rose by nearly 17 percent, six times more than the increase among whites.

Industry experts, calling it a promising sign of upward mobility, credit a wider array of mortgage options, more first-time homebuyer help and better marketing efforts. For the Baltimore region, local experts said, it's also about growing affluence - minorities, including immigrants, who are part of the middle class and eager to start building legacy wealth.

"I've always wanted to buy," said Catherine Neale, 52, a postal worker who, with her 23-year-old son, signed the final paperwork yesterday for their first home. The lifelong Baltimore resident is black.

For reasons ranging from higher rates of poverty to discriminatory lending practices, minority groups have long lagged behind whites in homeownership. Even in Maryland, where every group outpaces the national average, a sizable gap exists. The 2000 Census found that in the state, 75 percent of whites owned their own homes versus 60 percent of Asians, 50 percent of blacks and 48 percent of Hispanics.

Lenders see this as a huge opportunity. "They're trying to meet that demand," said Mike Taliefero, managing director of Compliance Technologies, a lending compliance consulting firm. "It doesn't have much to do with a social purpose - it's really a business opportunity. Economics are driving this."

But housing counselors said they fear that some of the lending changes in recent years that have opened the door to more minority homeownership are double-edged. They said looser financial standards - and "exotic" products such as interest-only, no-money-down loans - have created a pool of buyers at greater risk of defaulting. And because many bought at peak prices, buyers forced to sell now could find themselves owing more than a house would fetch.

Losing a home to foreclosure is worse than not having bought in the first place, because the financial damage is hard to overcome, counselors said.

The Southeast Community Development Corp., a nonprofit that focuses on the Highlandtown area of Baltimore, which has a growing Hispanic population, is seeing more homeowners in tight straits, said President and Chief Executive Marco Cocito-Monoc. He said he is concerned it's only the beginning.

"These are people who want to partake of the American dream, who have every right to, who really with a bit more work and a bit more financial planning could get there in a safe way, but who are lured - even seduced - by many of these lenders to go ahead and make this commitment too early, at a point before they're ready," he said.

Home loans to minorities soared across the board in the Baltimore region, which the report defines as the city and Anne Arundel, Carroll, Harford, Howard, Queen Anne's and Baltimore counties. Last year, four out of every 10 new mortgages went to minority buyers, higher than minorities' share of the metro-area population.

Live Baltimore Home Center, a nonprofit that markets city living, hasn't seen a change in the racial mix of prospective buyers showing up for its home tours.

"Homebuyers in the city have always been quite diverse," said Tracy Gosson, executive director of Live Baltimore.

Gayle Briscoe, a Realtor for 36 years whose customer base is largely African-American, helps those looking for homes in Howard, Carroll and Baltimore counties, as well as parts of Anne Arundel and the city. Her buyers increased by 44 percent last year. Her buyer pool has shrunk this year - part of the overall sharp slowing of the housing market - but not enough to erase all those gains.

Locally, Hispanics experienced the biggest rate of increase in loans. Their new mortgages jumped nearly 50 percent last year, to 2,400.

Mauricio E. Barreiro, 45, a Towson attorney who emigrated from Colombia as a child, said ownership is a driving force among the Hispanic community.

"We want to be the owners of businesses, we want to be the employers of people, we want to be a substantial part of the economy," said Barreiro, chairman of the Governor's Commission on Hispanic Affairs and the Baltimore County Human Relations Commission. "There's absolutely nothing wrong with renting - however, we want ownership."

So did Neale, the Baltimore resident. She started looking five or six years ago but found that she couldn't buy a home and put her son through college at the same time - so she held off on purchasing. Darrin M. Tate graduated in May, landing a job in Washington, and they quickly found a roomy single-family house in the Ashburton area. The price of housing had doubled, but together they could manage it.

"This is the neighborhood I've been dreaming about for as long as I've been thinking about buying," said Neale, who got closing-cost help and picked a fixed-rate loan so the payments will stay steady.

Briscoe, her Realtor all those years, said her heart is warmed to see Neale's deferred dream come true. "Everybody can relate to this," she said. "It doesn't matter what race you are."

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