There's no question that a homeownership gap exists in the United States between white, non-Hispanic Americans and other races. Attention to the issue and efforts to close it have been gaining traction.
The St. Louis Fed - or FRED - released U.S. homeownership rates for the first quarter of 2023, and the numbers have a good news/bad news feel:
The bad news is that the white homeownership rate is 38% higher than that of blacks/African Americans, 18% higher than Asian/Native Hawaiian/Pacific Islanders and 33% higher than Hispanics/Latinos. The good news is that homeownership rates rose year-over-year among all races - however moderately - as the market changed dramatically. The National Association of Realtors® (NAR®) released their "Wealth Gains by Income and Ethnic/Racial Group" report in April, which also showed optimism among the disparities:
While low and middle income homeowners' appreciation gains were approximately 52% and 24% lower than the upper income group's gains respectively, the dollar amounts were significant for those demos. Now that the lending and real estate industries are tracking and monitoring low to moderate income (LMI) and diverse markets, the question becomes how to improve growth for what have been traditionally underserved markets.
Tools to assist these people and geographic areas have greatly increased, as the Consumer Financial Protection Bureau's encouragement of Special Purpose Credit Programs (SPCPs) has undoubtedly motivated wholesalers to build on the government-sponsored enterprise mandates and plans with new products. Additionally, down payment assistance programs (DPA) are also on the rise: Down Payment Resource reports that an uptick in the number of homebuyer assistance programs available to help people finance homes increased to 2,362 nationwide in the first quarter of the year, and 83.5% of those programs had funds available for eligible homebuyers at the start of the second quarter. The tools are available; how do you use them to make a difference in the lives of the people and areas they're designed to help?
The right data can help wholesale and retail organizations to concisely target their outreach. Whether your focus is on researching geographic areas to bolster homeownership rates or identifying loan officers and real estate professionals who work with specific income and ethnic groups, the ability to tap a blend of multiple, highly accurate sources allows companies and producers to focus their efforts efficiently. Uncovering eligibility target areas for various SPCPs is fast and highly accurate; the same data can help companies locate professionals who use these programs or who could grow their careers by deploying them.
NAR®'s Chief Economist Lawrence Yun offered great optimism and opportunity commenting on his organization's wealth gains report when he stated, "This analysis shows how homeownership is a catalyst for building wealth for people from all walks of life. A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter." The lending and real estate industries are uniquely positioned to advance this practical, tangible wealth vehicle called homeownership. It's time to put technology and data to work to get more Americans on their way to wealth.
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]
