January 8, 2009

Hispanics and the Economic Downturn: Housing Woes and Remittance Cuts

I. Overview

Like the U.S. population as a whole, Latinos are feeling the sting of the economic downturn. Almost one-in-ten (9%) Latino homeowners say they missed a mortgage payment or were unable to make a full payment and 3% say they received a foreclosure notice in the past year, according to a new national survey of 1,540 Latino adults conducted by the Pew Hispanic Center. Moreover, more than six-in-ten (62%) Latino homeowners say there have been foreclosures in their neighborhood over the past year, and 36% say they are worried that their own home may go into foreclosure. This figure rises to 53% among foreign-born Latino homeowners.

The economic downturn has also had an impact on the amount of money Latino immigrants send to family members or others in their country of origin. Among Hispanic immigrants who sent these remittances in the last two years, more than seven-in-ten (71%) say they sent less in the past year than in the prior year. However, while the amount of money Hispanic immigrants say they sent abroad has declined, the share of Hispanic immigrants who say they remitted funds is unchanged from 2006. More than half (54%) of foreign-born Hispanics, and more than one-in-three (36%) Latinos, say they sent remittances in the past year. In 2006, 51% of the foreign-born, and 35% of all Latinos, said they sent remittances in the prior year.

Latinos make up 15 percent of the total U.S. population, and in many respects their downbeat assessment of the nation’s economy is similar to that of the general population. According to a recent survey from the Pew Research Center for the People & the Press (December 2008), almost six-in-ten (59%) say the U.S. economy is in poor condition, a belief held by 63% of Latinos. And similar shares of the general U.S. population and Latinos say that jobs are difficult to find where they live—73% versus 78%.

However, Latinos hold a more negative view of their own current personal financial situation than does the population as a whole. More than three-in-four (75%) Latinos, and 84% of foreign-born Latinos, say their current personal finances are in either fair or poor shape, while 61% of the general U.S. population says that. But Latinos are more optimistic than others about the future: 67% expect that their financial circumstances will improve over the next year; just 56% of the general population feels the same way.

As the economy has soured, many Latinos are adjusting their economic behaviors. More than seven-in-ten (71%) report that they have cut back spending on eating out. Two-thirds (67%) say they planned to curtail holiday spending. More than one-fourth (28%) report that they helped a family member or friend with a loan.

A majority of Latinos (57%) say they do not have a very good understanding of recent financial problems involving financial institutions and companies with ties to the housing market that have dominated the economic news in recent months. When asked who or what has contributed to these problems, a large majority of survey respondents (76%) point a finger of blame at individuals who took on too much debt. But most Latinos also blame the lending policies of banks and financial institutions (70%) and insufficient government regulation of financial institutions (67%).

This report is based on a bilingual telephone survey of a nationally representative sample of 1,540 Hispanics ages 18 and older. Interviews were conducted from November 11 through November 30, 2008. The margin of error for the full sample is plus or minus 3.0 percentage points at the 95% confidence level. For a full description of the survey methodology, see Appendix A. Key findings of this study include the following:



Economic Conditions, Jobs and the Credit Crisis

Personal Financial Situation

Economic Behaviors

About this Report

The National Survey of Latinos 2008, Economics and Politics, focuses on Hispanic adults’ views of the state of the economy, their own personal finances and housing market conditions. It also asks about the sending of remittances in the past year and how Latinos have changed their economic behaviors in the economic downturn. The survey was conducted from November 11 through November 30, 2008, among a randomly selected, nationally representative sample of 1,540 Hispanic adults. The survey was conducted in both English and Spanish. The margin of error for the full sample is plus or minus 3.0 percentage points.

A Note on Terminology

The terms “Latino” and “Hispanic” are used interchangeably in this report, as are the terms “foreign born” and “immigrant.”

The terms “general population” and “general public” are used interchangeably in this report to refer to the entire U.S. adult population, including Hispanics.