The housing ecosystem is evolving, and we’re witnessing circumstances to be more favorable for underrepresented groups than previously. Will 2017 continue this progression?
Market
While low mortgage rates are undermined by high home prices, buying in southern metros is at times more than 50 percent cheaper than renting, according to Trulia. Buyers in the West, where high rents often remain preferable to rising home prices, face a tougher task.
Agents must recognize these conditions and the fact that international investment in U.S. real estate is expected to continue. In the first half of this year, Asian investors invested $4.02 billion in New York real estate and $1.4 billion in San Francisco property alone—the top two most desired American destinations for their capital.
Women and Minorities
Single women accounted for 15 percent of homebuyers in 2015, compared to 9 percent single men. The desire to own a home, coupled with professional advancements, make women a formidable source of purchasing power; in fields like civil engineering, women increased 977 percent from 1970 to 2010, and the percentage of married couples where the woman earns at least $30,000 more than the man rose 3 percent between 2000 and 2015.
According to the U.S. Census Bureau, from 2014 to 2015, the Hispanic poverty level declined from 23.6 to 21.4 percent, and the median annual income of Hispanic-origin households rose 6.1 percent, from $42,540 to $45,148. Similarly, the poverty level of black households decreased to 24.1 percent from 26.2, and their median annual income increased 4.1 percent, from $35,439 to $36,898. As their incomes rise, minorities will progress out of poverty, and their presence among homebuyers will grow.
In addition to their personal advancements, women and minority homebuyers will be assisted by government policies in 2017.
Recently, the Federal Housing Finance Agency (FHFA) issued a Notice of Proposed Rulemaking (NPRM) on proposed amendments to its Minority and Women Inclusion regulations. Among proposed changes, the amendments would:
- Encourage the regulated entities to expand contracting opportunities for minorities, women, and individuals with disabilities through subcontracting arrangements; and
- Require the regulated entities to amend their policies on equal opportunity in employment and contracting by adding sexual orientation, gender identity and status as a parent to the list of protected classifications.
In October, Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), stated that redlining would be a priority for the Bureau in the coming year. By focusing on redlining, the Bureau is demonstrating that discriminatory practices remain a large issue, behooving the housing ecosystem to eradicate them and allow consumers to exercise their buying power.
Despite high home prices, 2017 is expected to observe noteworthy buying activity from several groups. Underrepresented groups will receive the attention and help of impending government policies, which will create a clearer path to homeownership.
A growing market of capable buyers will help strengthen the housing ecosystem and economy. These buyers are looking for the help of experienced professionals. Will you be ready for the buyers of 2017?
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