The demographics of the U.S. are shifting as millennials and minorities are making up a larger share of the population. This transition creates a phenomenal opportunity for mortgage lenders to serve these groups as they look to purchase homes.
Post-crisis homeownership rates for millennials and minorities nonetheless remain depressed. During the second quarter of 2016, 45.1% of Hispanics were homeowners, down from its peak in 2007 of 50.1%. Similarly, just 34.1% of people under 35 owned their home in the second quarter, down from its peak of 43.6% in 2004, according to Census Bureau data.
One contributing factor to the sunken homeownership rates is mortgage companies’ lack of hiring and marketing focused on these demographic segments. Kristin Messerli is the founder and managing director of Cultural Outreach Solutions, which specializes in assisting mortgage companies to reach these underserved communities. She asserts that by not making it a priority to bring on minorities and millennials, mortgage firms are leaving money on the table.
A study of 14,000 mortgage professionals by Stratmor Group in 2015 found the average age of mortgage loan officers is 47, with 10% over age 60 and just 3.3% under 30 years of age. 81% of loan officers self-reported as white, while just 10% identified as Hispanic or Latino and only 3% identified as black.
Patty Arvielo, the president and co-founder of New American Funding, emphasizes the importance of diversifying loan officers, sales support staff, and upper-level management. She also points out that Latinos find common ground in religion and being family-oriented, so having lenders with aligned values helps immensely. Marketing doesn’t need to pander; the majority of Hispanics speak English proficiently. Arvielo believes it’s best to allow loan officers to choose the best way to engage with prospective clients.
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