Study: 5-in-6 Hispanics cannot afford O.C. home

The vast majority of Orange County’s Hispanic households — roughly 1-in-3 of our population — are priced out of the local housing market, according to a new study of race, ethnicity and housing economics in 276 U.S. markets by the National Association of Home Builders.

According to NAHB math, only 15.7% of O.C. homes sold in 2010 were “affordable” to those local Hispanic households earning this demographic’s $55,400 median income. That compares to 42% of Orange County homes sold in 2010 being “affordable” to the entire Orange County population earning its median income of $87,200 for the year. HAHB defined affordability as a sale where estimated house payments — assuming 30-year, fixed-rate mortgage with 10% downpayment — ran less than 28 percent of income. Only three major U.S. markets — San Francisco, New York and San Luis Obispo had lower Hispanic home affordability, by this math.

Orange County’s low affordability for Hispanics — and the group’s large gap compared to overall affordability — was a trend seen nationally, too. By NAHB math, 73% of homes sold in the U.S. in 2010 were deemed “affordable” to families earning the national median income of $64,400. For Hispanics earning the group’s nationwide, median family income of $44,100, only 51% of all U.S. homes sold were seen as “affordable” in 2010 by NAHB standards. By the way, only five U.S. markets had poorer overall home affordability than Orange County, by this math: New York, San Francisco, Los Angeles, Santa Cruz and San Luis Obispo.

Other Orange County affordability measures, by demographic:

Whites: 58% of Orange County homes sold in 2010 were affordable to those in this demographic earning their median income of $108,100 for the year.
Blacks: 31% of O.C. homes were affordable to those households with the group’s $75,200 median income.
Asians: 42% of O.C. homes affordable at the group’s $86,900 median income.
American Indian /Alaska Natives: 33% of O.C. homes affordable at the group’s $77,900 median income.

NAHB writes” “In conclusion, while provides a useful overall measure of overall housing affordability for the country or a specific market, income differences across race/ethnic groups are so significant, that a breakdown of the HOI by race/ethnicity in fact reveals stark differences in affordability across these groups: Whites generally have much higher HOI than Blacks, Hispanics, American Indians/Alaska Natives, and to a lesser degree, Asians.”

Note: NAHB got its 2010 sales transaction data from CoreLogic. For regional income estimates, NAHB used median family income estimates for each race/ethnic group from Census’ 2006-2008 American Community Survey.

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