The housing market here is heating up. And that can be a real challenge for Latino home buyers, especially those new to this country. Latinos already lag behind whites in homeownership. Today, as part of our series “Losing Ground,” CPR’s Andrea Dukakis follows one Latino family looking for a home. Then she speaks with Rosa Madrigal. Madrigal works for Del Norte in North Denver, which helps low income residents buy homes.

[Photo: CPR News/Adukakis]

David Garcia's Search for a New Home

David Garcia is 21. Born in Mexico, he’s a legal resident, and he wants to buy a home. He's allowed CPR's Andrea Dukakis to come along on a hot summer Saturday while he looks at houses in metro Denver. He has about $145,000 to spend--maybe he'll stretch it to $150,000. 

A new house isn’t just for him. It’s for his girlfriend and his two-year old son, his mother, his sister, and his two brothers -- seven people total. Garcia figures he needs two bedrooms and a basement that can be turned into a few rooms. "Just something big enough for my family," he says. "Something nice, something I can probably work on to make it better." 

Garcia works at a printing company.  He’s one of a growing number of Latinos who want to buy homes, but who face new obstacles. For one, after years of easy credit in the 1990’s and easy access to loans, the pendulum has swung the other way. Today, banks aren’t as willing to lend.

Still, Garcia’s got a leg up. He saved money for a down payment and he’s pre-approved for a loan. "I just have to find a house now," he says. "There's a lot of people trying to buy a house, so a lot of competition."

Garcia wants to live in Southwest Denver where there is a big Latino community.  He told his broker he wanted to look at three houses. But she found only two new listings that fit his budget.

House Number One

House #1 is a small red brick home that looks like it hasn’t been taken care of. It was recently in foreclosure; the signs are still taped up in the windows. When Garcia walks in, with his sister, a cousin, and his mom, there are already two other families packed inside looking at the house. There’s a basement, which they wanted. They troop down the stairs to check it out. There’s a bathroom here. But his realtor, Luz Daniels, points out, there’s mold on it. And the shower is just a drain in the floor. It's hard to imagine a bedroom down here.

"David, no tiene piso. There’s no flooring down here," Garcia's realtor says. "It looks more like a workroom. David would have to do a lot of work." 

Obstacles to Latino Home Ownership

More than half of Luz Daniel's clients are Latinos--all eager to buy homes. Still, in Colorado, Latinos are far less likely than whites to own their own homes. Five of 10 Latino households own. Of white households, seven in 10 own their own homes. Experts point to a few reasons for the gap. One is that there aren’t a lot of small houses available for these buyers. Many are first-time buyers, on tight budgets. And builders haven’t caught up with the market, because they’re still skittish about taking on new projects. There’s also competition from Wall Street. Big investors are snatching up foreclosed homes and turning them into rentals.

But Garcia doesn’t want to rent anymore. "Renting, you’re just paying for someone else’s house," he says. "If you buy it, it’s for you." 

Latinos have another obstacle. Luz Daniels says her Latino clients tend to use cash instead of credit cards. That makes it tough to get credit. Garcia doesn’t have much of a credit history, but he has enough to get a loan. 

Garcia isn't sold on the first house. "It’s OK," he says. "It needs some fix-ups. You have to look at the price--$150,000," he adds. "The other one is 125, so let’s see it."

House Number 2

House number 2 is a mile away. It's also been in foreclosure. It’s brick, like the other one. But unlike the first house, this one has a long crack in it, running from the roof to the ground. From the outside, you can see clear through it into one of the bedrooms.

"So they made an addition and you can see clear through," Daniels says. "Only an engineer can tell you if it's structurally sound. So it may be better to run." The Garcia family doesn't have the cash to make big repairs. 

The good news is that there are four small rooms on the ground level and two rooms in the basement. But there’s more mold in the bathrooms and a lot more peeling paint. Some more good news: There’s a big yard out back--but with lots of overgrown grass and areas piled high with cement.  There’s a two-car garage--but it has broken windows. 

"I’ll have to think about it," Garcia says. "There are pros and cons. This one has a nice lot size, but more damage. The other one's in a better neighborhood. So they’re kind of even, I guess." 

After some thought, Garcia decides neither of the houses is right.  He’s going to keep looking. Between his relatively small budget and the lack of affordable homes on the market, it could take a while. 

-- Andrea Dukakis, CPR News