Building A More Diverse Future

As the nation struggled through the pandemic, the housing market seemed to be revitalized, and a variety of factors played a role in this kickstart.

According to a recent National Association of Realtors (NAR) survey, U.S. homeownership rate surged 1.3% to 65.5% in 2020—the highest annual rise ever—as 2.6 million more households became homeowners compared to 2019.

Among the 2.6 million new households, new emerging markets were blazing new paths. NAR’s data found that white Americans (72.1%), Asian Americans (61.7%), and Hispanic Americans (51.1%) all achieved decade-long highs in homeownership in 2020, with the rate of Hispanic Americans setting a record, exceeding 50% for the first time ever. One demographic that saw a decline was the homeownership rate for Black Americans (43.4%), which trailed behind that of a decade ago (44.2% in 2010).

“Homeownership can be a way to build generational wealth for families, but there are significant barriers to entry, especially in today’s high-priced and fast-moving housing market,” said George Ratiu, Manager of Economic Research for Realtor.com. “There are a number of programs available to help first-time buyers break into the market, but many people either don’t know that these programs exist or don’t know where to start in finding one that works for their situation.”

These new markets were not the only components boosting the nation’s housing market. Outside of these new emerging markets, gender roles continue to bring diversity to the mortgage space, as a once male-dominated share had begun to give way to the growing single-female seeking to build equity and wealth through the pursuit of homeownership.

First American recently reported that despite the aftermath of the Great Recession when the overall homeownership rate reached a low point of 63% in 2016, 2021 saw that total rebound to 65.5%. This rise was led by single female-headed households (including widowed, separated, or divorced) which exceeded 53% in 2021, jumping from a low mark of 50% in 2016.

An analysis by the National Association of Realtors (NAR) further supports the claim that single women are prioritizing homeownership, as 42% of single women make financial sacrifices, compared to 32% of single men who purchase homes.

With these new and emerging markets comes the dilemma faced by the mortgage finance industry. Who is tapping into these markets? How are these new segments being marketed to? Are certain segments of these new emerging markets comfortable dealing with just anyone in closing the largest financial decision of their lifetime? Do they seek familiarity and common ground with the loan officers they are dealing with?

Using a database of 30 million profiles, employment-seeking web site Zippia polled demographics and statistics for Mortgage Bankers in the U.S. (verified against the Bureau of Labor Statistics, U.S. Census, and current job openings), finding that of the more than 50,400 Mortgage Bankers currently employed nationwide, 28.7% of this share are women, while 67.8% are male, with an average overall age of 44 years old. In terms of ethnicity, the most common found ethnicity was white (67.5%), followed by Hispanic or Latino (14.6%), and African American (8.7%), while 6% of all Mortgage Bankers identified as LGBTQ+.

MReport?assembled a panel of industry experts to weigh in on the topic of diversity and inclusion in the marketplace, sharing their insight on the topic, from across the mortgage landscape.

Recent numbers show the Black homeownership rate in the United States stands at around 43.4%, which is only slightly better than it was in 1970, and nearly 30 percentage points behind the white homeownership rate of 72.1%. Why is that gap still here, more than 50 years after the Fair Housing Act?

Read the answer from Tai Christensen, Director, Chief Diversity & Inclusion Officer, CBC Mortgage Agency and the remainder of the article here:

https://themreport.com/daily-dose/04-04-2022/building-a-more-diverse-future