Hispanic population embraces home equity loans

Use of mortgage-based credit products increases among segment
Inman News
Home equity loans and home equity lines of credit have grown significantly in usage among the Hispanic middle-class population, according to a recent analysis.

Use of home equity loans jumped 35 percent within the population segment from 2003 to 2004, while home equity lines of credit increased 25 percent, according to an analysis of data from the Integras Market Audit.

The analysis found that 10.1 percent of Hispanic homeowners with incomes ranging from $40,000 to $100,000 took out a home equity loan in 2004, compared to 7.5 percent in 2003, and 12.7 percent applied for home equity lines of credit in 2004 compared to 10.2 percent the previous year.

"The data showed that the greatest gains within the Hispanic population (from one year to the next) in both credit products was in the Hispanic middle class, which is the largest-growing population segment in the U.S.," said Julie Simard, an Integras Customer Research Consultant, who conducted the analysis.

Integras is the analytical services division of Claritas Inc. and the administrator of the Market Audit – a survey of household financial behavior. Data for the analysis was developed from more than 175,000 interviews comparing the percentage of equity product penetration, year-to-year, ending in the fourth quarter of 2004.

For affluent Hispanic homeowners with incomes of $100,000-plus, the household penetration levels for loans was 12.5 percent and 19.7 percent for lines of credit.

Comparing all homeowners to Hispanic homeowners, the 2004 numbers for home equity loans were virtually the same at 8.9 percent and 8.8 percent, respectively. However, for lines of credit there was a comparative gap at 16.8 percent for all homeowners and 11.7 percent for Hispanic homeowners.