There are a lot of challenges facing consumers and the housing industry these days. Persistently tight inventory, interest rate shifts and a volatile post-COVID economy have created conditions that many adult consumers have never been exposed to. The whole industry is abuzz about the shock of market conditions we haven't seen in decades. As we weather this tumultuous climate, 78% of Americans still believe homeownership is the American dream according to a survey conducted by Mynd Property Management. With real estate sales and lending volume down considerably from recent years, professionals are understandably scrambling for business. As companies and professionals consider how to maintain and sustain during difficult times, growth seems elusive: everyone scrambling for a bigger piece of a shrinking pie. But now is an excellent time to blaze trails into new territory…the housing industry has an opportunity to create growth and work to tackle a persistent issue: The housing gap.
In spite of all that lawmakers, trade organizations and housing professionals have put in place to drive change, the statistics really haven't budged in half a century: The disparity between white and black homeownership rates is larger than it was in 1960, when housing discrimination was legal. There was a 27-point difference between black and white homeownership in 19601, and a 28.6-point difference in 20232. Lenders and real estate agents now have a lot more in their toolkits to help underserved consumer groups. While Federal Housing Administration (FHA) loans are a traditional tool to help first-time and lower income buyers, down payment assistance (DPA) programs are growing in popularity and usage. In this era of decreasing affordability, 83.5% of all home buyer assistance programs in the U.S. were actively funded and available as of the first quarter of 20233. Additionally, government-sponsored entities Fannie Mae and Freddie Mac now pursue purchase of loans originated using special purpose credit programs (SPCPs). We have a lot of terms and tools designed to help groups that are underrepresented in national homeownership rates. So, how can lending and real estate professionals help these consumers become homeowners?
Rather than taking a "spray and pray" marketing approach to reach renters, low-to-moderate income (LMI) and majority minority census tract (MMCT) consumers, data can help companies recruit producers and identify partners that specialize in areas they'd like to serve. Begin by reviewing your market service area and determining which loan officers and real estate agents work with groups you'd like to help and use the products designed for them. The data can be dynamically filtered in multiple ways, including loan type (such as FHA), loan amounts in a specific range, MMCT areas and more. Identifying and connecting with the lenders and agents that are already working in diverse, underserved areas greatly narrows your search and helps you to focus your efforts as you tap into an existing network.
Making concerted efforts to help more Americans' dreams become reality can help housing professionals survive in today's market reality.
Jeff Walton is CEO of InGenius. With over 35 years in home mortgage and as a CEO and President of large national mortgage companies, Jeff is focused on helping the industry achieve high performance using actionable intelligence. Interested in learning more? Book an intro call with InGenius Data.
[1 - Urban Institute - "Reducing the Racial Homeownership Gap"]
[2 - Harvard Joint Center for Housing Studies - The State of the Nation's Housing 2023]
[3 - Down Payment Resource Q123 Homebuyer Assistance Program Trends]