Minorities in Los Angeles are more likely to have negative equity loans, a recent Zillow report suggests.
In L.A.’s predominantly Latino neighborhoods, 7 percent of all homeowners owe more on their mortgages than their homes are worth — that’s compared to 4.3 percent of homeowners in predominantly white neighborhoods and 5.7 percent of all homeowners in L.A., according to the Zillow report.
Known as underwater loans, negative equity situations are even more prevalent among African African homeowners. Although Zillow did not have enough data on predominantly black districts to calculate an L.A.-specific rate, one in five black households in America have underwater loans — that’s twice the overall U.S. underwater rate of 10.9 percent.
“Homeowners in predominantly black communities are twice as likely to be underwater on their mortgages as homeowners in mostly white communities,” Zillow found, attributing the disparaging numbers to the aftermath of the recession and housing crisis of 2007.
“Our previous research has shown that negative equity is more concentrated among less expensive homes, and now we know that it is also more prevalent in minority neighborhoods than in white communities, which are also trailing in the overall housing recovery,” Zillow chief economist Svenja Gudell said in a statement. “These gaps can and will have long-lasting implications for growth and equality.”
Nationally, the rate of homeowners with underwater loans is 9.9 percent for white areas and 12 percent for Latino neighborhoods. [LA Weekly] — Cathaleen Chen