Home buying season is in full swing and with more homes expected to hit the market it should be a busy season. If 2016 shapes up to be like 2015, we can expect about 32 percent of the homebuyers to be first timersi. How are these first time homebuyers unique in comparison to past generations of buyers? Many of them will be Latino.
For the first time in 10 years, Latino homeownership rates spiked upward while overall homeownership rates continued a downward trend. In 2015 Hispanics accounted for a historic 69 percent of the net growth in U.S. Homeownership and the trend will continue for years to come. In effect, 52 percent of new homeowners between years 2010-2030 will be Latinoii.
With these numbers, it’s no surprise the housing industry is scrambling to find more effective ways to connect with these vital buyers. Competition is heating up for the fastest growing home buying segment, and those involved in the home buying process will have to learn how to connect with a demographic previously invisible to the industry. The market needs programs, products, educational materials, affordable inventory, among many other things… But most needed are professionals that can relate to the buyer.
With less than 10 percent of mortgage professionals being culturally diverse, being relatable to a growing number of diverse home buyers is no small feat. But there are some best practices to be learned and it starts when Hispanic buyer enters the picture and continues with culturally competent professionals knowledgeably guiding the experience.
Corina is from El Salvador and immigrated to the U.S. over a decade ago. She and her mother work in Boston and saved money from their modest jobs in the cleaning business. The idea of owning a home in the U.S. was always a dream of theirs but at times she doubted it would ever become a reality. Corina knew she needed guidance through the home buying process and started with a Hispanic real estate agent. This agent walked her through it and connected her with a loan officer who would also assist her. Aside from saving money, Corina needed help getting her credit ready for the responsibility of owning a home.
George Uribazo is a loan officer with PrimeLending, based in Dallas, Texas with offices all over the U.S. George has an office in the inner city neighborhood of East Boston, which has a high concentration of Hispanics in the surrounding area. Everyone in his branch (loan officers, sales support and processor) are Latino and able to assist clients in Spanish, many times the language of preference. It may be surprising to know that Massachusetts is one of only six states (Illinois, Louisiana, Massachusetts, New Jersey, New York and Rhode Island) in the country to attribute all of its growth to the Hispanic populationiii. Mr. Uribazo came to the U.S. at age 10, and his professional services are in high demand. After many years in the industry, real estate agents in his market know and trust him. His company, in turn, also understands the importance of strategic office location to serve diverse communities. They also explore ways in which to serve all types of borrowers, including offering products and programs tailored for clients like Corina and her mom.
Culturally competent professionals beneficial to a purchaser’s experience in the complex home buying process. Sara Rodriguez, part owner of EKKO Title in Virginia, also knows that her cultural understanding comes in handy and at times saves the lenders she works with money by avoiding costly mistakes. For example, many Hispanics use two last names. As a Latina, Sara knows this and ensures the title is in the correct name (and order). Something as simple as that can cost thousands of dollars of issues if not caught on time.
Corina is excited about her new home and eager to tell her family and friends about her great experience. Surely, when they are ready to make that leap they will be contacting her realtor and loan officer who made an otherwise scary transaction a little less so as a result of their personal connection and understanding.
i NAR Home Buyer and Seller Generational Trends Report 2015
ii The Hispanic Wealth Project and NAHREP State of Hispanic Homeownership Report
iii Pew Hispanic Research