What business-development opportunity offers all
of these factors? The answer: the minority homebuyer market. If your 2018 business strategy isn’t
inclusive of diverse markets, you are missing a
huge growth opportunity.
A large, hot market
According to a December 2016 report from the Harvard University Joint Center for Housing Studies,
the share of household growth in the U.S. accounted for by minorities will jump from 72 percent between 2015 and 2025 to over 90 percent between
In an environment where refinances are pointing downward, mortgage originators must seek
opportunities where they can make up for lost
revenue lines. Since the Great Recession, we have
seen some strong recovery, but the nation’s overall
homeownership rate declined to 63. 4 percent in
2016, which was a 51-year low.
Comparatively, however, the Latino market was
the only segment to increase its homeownership
rate between 2015 and 2016, from 45. 6 percent to
Diverse markets are many times seen as the “LMI,”
or low- and moderate-income segment, but that is
a narrow and short-sighted view. Although many
minority groups are still working hard to fill the
gap between their income and the income levels
in the overall market, there has been a great deal
of progress made.
In fact, Hispanic-household annual median real
incomes rose by 6.1 percent in 2015, according
to a U.S. Census Bureau study. That was the largest gain among all population groups, which also
helped to roll back poverty levels. Median income
for Hispanic households jumped again in 2016, by
4. 3 percent, Census Bureau figures show.
It’s likely we will continue to see these data points
trend positively so long as Latinos continue to drive
the growth in the nation’s workforce. Between 2010
and 2016, Hispanics accounted for 76. 4 percent of
the growth in the U.S. labor force. That’s three out
of four new workers added to the U.S. economy.
L. Maria Vergara is president of NAHREP
Consulting Services, a marketing-consulting company specializing in
the Hispanic segment of the housing
industry. Vergara has more than 20
years of financial-industry experience. Her expertise in
how cultural nuances factor into buying decisions and
consumer behaviors has been critical to developing
successful strategies for financial-service companies
reaching diverse markets. Vergara holds a bachelor’s
degree in international relations and a master’s degree in
marketing. Reach her at firstname.lastname@example.org.
Plenty of optimism
As part of an overall effort to support the housing
market, Fannie Mae gathers attitudinal feedback
from consumers. Its National Housing Survey conducted between October and November of 2016
found that Hispanics continue to hold an optimistic
economic outlook on their personal financial situations and also feel it’s a good time to buy a home.
Hispanics continue to overwhelmingly prefer
homeownership to renting, with some nine out
of 10 Hispanics indicating in the Fannie Mae survey that in the future they are more likely to own
a home than rent. Of those Hispanics who already
own a home, 90 percent indicated they are satisfied with the features of their existing mortgage.
Also, due to the nature of the Latino family structure — with many living in extended-household
situations — the likelihood that mortgage originators will receive referrals from multiple members
or generations of one household is high.
The next move
With these important factors to consider, why
wouldn’t your 2018 business-development activities include, if not revolve around, diverse markets as a key driver for your business? If you are
convinced, or at least intrigued, then how can you
begin the process of tapping into this opportunity?
First of all, don’t go translating everything in
your marketing library. That’s a nice intent, but you
would be missing the forest for the trees. Take a
more strategic view of the segment and take inventory of what you know and what you need to know.
n Become involved in diverse markets. There
are many reputable organizations that were created to help increase sustainable homeownership
within diverse markets. The National Association of
Hispanic Real Estate Professionals, The Asian Real
Estate Association of America and National Association of Real Estate Brokers are good examples.
n Create strong relationships. Seek out other
organizations that understand these diverse
market segments. Those sources can include
housing-finance agencies, credit-counseling
services, economic-development councils and
other professional networks — the Hispanic
Chamber of Commerce, for example.
n Tap into your own resources. Employee
Resource Groups (ERGs) and other types of
business-networking groups are excellent places
from which to draw talent, ideas and thought leadership. ERGs can tell you where to look for more
talent, or give you opinions on your current product offerings. You may even identify future or un-derutilized talent. Your ERG can be a great focus
group and even help guide whether or not you
should translate or create any language materials.
Of course, you also should seek assistance from
consultants and mentors who can guide your activities to ensure you are moving toward a profitable
and sustainable long-term strategy. n
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