What a difference a year makes: The mood at the Mortgage Bankers Association's (MBA) annual conference was very different in Denver than it was last year in Philadelphia, when mortgage rates were just about to peak at 7.79%. Rates were about 1.25% lower when this year's massive industry gathering took place; but challenges abound. Election season is over, and 2024 is coming to a close; so, it's time to focus forward. The MBA predicts a 28% increase in production next year, so every company, team and producer must decide what their focus will be and how they want to go about getting their share of the growth. Beyond meeting our general production goals, 2025 can be a year where the housing industry moves beyond discussing affordability challenges, the housing gap, and underserved markets, and develops plans and action steps to solve these real and growing problems. Many trade organizations, economists, and foundations study and report on these issues; so, what can housing professionals actually do to make a real difference?
Underserved consumers are the focus of a great deal of research and discussion in the academic and regulatory echelons of the housing industry; and these groups have put forth many recommendations of what should be done to narrow the housing gap for various low-to-moderate income (LMI) and other demographic segments. While lending and real estate professionals may care deeply about helping underserved markets, they face the reality of running their individual teams and practices, earning a living, and balancing work with life. There's no shame in working with the proverbial "low hanging fruit," but the industry needs to realize that it could be easier than they think to simultaneously engage with, nurture, and convert more LMI and majority minority census tract (MMCT) consumers into homeowners. It starts with the desire to make a difference; the next step is to commit to a few actions that can create real change with the understanding it will take time.
Start with What - or Rather Who - is Working
The first and simplest way to bolster efforts in underserved markets is to find and connect with the lending and real estate pros who currently operate within those communities. Lenders can use dynamically filtered data at the company level to identify loan officers who work with targeted areas and demographics and pursue them to join their organizations. Next, loan officers can review real estate brokerages, teams and individual agents with LMI and MMCT clientele. Loan officers and teams can focus their partnership efforts on agents in underserved markets for fast growth.
Leverage Your Tech to Engage and Educate
Underserved communities likely need more time to get in position to purchase homes. On the surface, this means a longer sales curve and more time in the pipeline, but the right tech combination can minimize the effort. Content that captures the interest and promotes possibility is necessary to engage underserved markets and encourage them to raise their hands for more information, to get on a credit building or repair plan, and to learn about low down payment and down payment assistance programs they may be eligible for. Once you have a solid library of relevant messaging, your automation can do the heavy lifting for that longer lead nurture phase. Marketing that stays in front of these consumers and reminds them that they're on a path to an obtainable goal is a great way to build and solidify relationships.
We know that home prices have grown exponentially in recent years, and even though the August S&P CoreLogic Case-Shiller Home Price Index showed a dip in prices at a glance, there was still modest growth when the numbers were seasonally adjusted. While price growth seems to be moderating, the gains of recent years accelerated beyond the buying capacity for many potential buyers. It's too soon to tell what effects changes in the D.C. political landscape will have; however, two recent statistics show the importance of rallying the public to strive to become homeowners:
- Redfin noted that the number of renter households grew at three times the rate of homeowner households in the third quarter of this year.
- 2) First American Financial recently published research that showing a $398,000 wealth gap between renters and homeowners from 2006 to present. Homeowners who bought in 2006 gained a cumulative $169,000 in equity, while renters over that same time period cumulatively lost $229,000 in wealth.
We'll see what the newly-elected MBA officers for 2025 accomplish on the underserved communities front; but there's no better group to tout the wide-ranging, generational benefits of homeownership than the lending and real estate professionals who work to get people into homes every day. The theme at MBA Annual was "Elevate!" As we work to "elevate" our production, let's join together as an industry to elevate consumers to their next level of homeownership and its critical role in the American Dream.
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.
