Minorities worry more about housing slump: poll

By Emily Kaiser

NEW YORK (Reuters) - African-Americans and Hispanics are far more worried than whites about declining U.S. house prices, and are three times more likely to say it is getting tougher to obtain a home loan, a Reuters/Zogby poll released on Wednesday shows.

As the subprime mortgage mess prompts lenders to tighten credit terms, minorities appear to be feeling the pressure more acutely, perhaps reflecting a sense of discrimination, said pollster John Zogby.

The nationwide telephone survey of 1,020 likely voters was conducted August 9-11, when concerns about tightening credit terms sparked a global stock market slide. The margin of error was plus or minus 3.1 percentage points.

Some 60 percent of African-Americans said they were very concerned about declining home prices, compared with just 19 percent of whites. A third of Hispanics said they were very concerned.

More than one in three African-Americans and Hispanics said they thought it would be more difficult to get a home loan now than a year ago, compared with 11 percent of whites.

Zogby said the findings reflect growing economic uncertainty and a feeling of declining hope among minorities, even as consumer confidence surveys show Americans overall feeling generally upbeat.

The Reuters/University of Michigan Surveys of Consumers showed consumer sentiment rose in July, and just 19 percent of consumers expected the economy to worsen in the year ahead.

"This is a bifurcated country," Zogby said. "There is an enormous amount of economic anxiety among minorities."

Some of that may reflect a long-running sense of discrimination -- both real and perceived -- in the housing market, he said.

A study released earlier this year by a group of fair housing agencies found that in six major U.S. cities, black borrowers were 3.8 times more likely than whites to receive a higher-cost home loan, while Hispanic borrowers were 3.6 times more likely to pay more.

The housing market downturn has exposed lax lending standards, particularly among subprime mortgages given to people with poor credit histories as well as so-called Alt-A loans that required little or no documentation of income.

As the default and foreclosure rate on those loans has soared, banks have tightened lending standards.

A Federal Reserve survey of loan officers, released on Monday, showed that banks have further tightened credit on subprime and non-traditional mortgages, and were also taking a more cautious tone toward prime mortgages.

Many borrowers took out adjustable-rate mortgages in 2005 and 2006 that will soon reset at higher rates, making monthly payments more expensive and likely triggering more defaults.

As the housing downturn and mortgage resets hits more households, Zogby said he expects polls to reflect deepening economic uncertainty, among both minorities and whites, heading into the 2008 presidential election.