As housing industry players reckon with expectations that as much as two-thirds of the nation's housing growth over the next 15 years will come from "minority" heads of household, many are gearing up sales training programs to try to meet the multicultural challenges in the real estate marketplace.
While national home ownership rates are at an all-time high of 68.3 percent, minority homeownership is lagging at 49 percent vs. 74 percent for non-Hispanic white families, according to the U.S. Census. At even a lower percentage rate of 46 percent, Hispanic family homeownership growth has been hurt, not only because of a lack of access to mortgages from financial institutions but because of deep-seeded cultural home-buying processes in the U.S. At the same time, Hispanic buyers are projected to represent as much as 40 percent of first-time home buyers over the next 10 years, according to Gary Acosta, chairman of the National Association of Hispanic Real Estate Professionals. First-time home buyers trend today at about 45 percent of the home sales market.
"The numbers in themselves are significant, but even more important is that everybody has a stake in this growth among first-time home buyers," Acosta says. "Getting people into those starter homes allows people to move up to their next purchase and feeds the entire spectrum of home sales."
Century 21 Real Estate Corporation has just aligned with NAHREP to offer its real estate professionals an online certification program -- the NAHREP Certified Professional program--to help sales people understand and work with the cultural and financial barriers to entry for Latino homeownership.
"Language certainly is a number one challenge for sales professionals trying to take advantage of the tremendous opportunity in working with the Latino community," Acosta says. But, also, cultural differences that preclude many Latinos from gaining access to mortgage approvals are proving to be hurdles for prospective buyers. "Many Latinos are 'unbanked,'" Acosta says, meaning they have no relationship with a financial institution. "And many Latinos' fear of debt has prevented them from getting a credit rating necessary for loan approval, and we're working with financial institutions on that issue."
Thanks to immigration and higher rates of natural increase, the minority share of households increased from 17 percent in 1980 to 26 percent in 2000, and will likely reach 34 percent by 2020, according to the Joint Center for Housing Studies of Harvard University. "Minority household growth over the next 10 years will add significantly to the growth in household heads aged 55 to 74, and help to offset losses of white household heads aged 35 to 54 as the Baby Bust cohort reaches middle age," the JCHS "The State of the Nation's Housing" report says.
Acosta says that the partnership with Century 21 works because, "in the Latino community, Century 21 is regarded as the leading brand in the real estate business, and this program focuses on professional education, which will help Century 21 become an even stronger brand name among Latinos."
In 2000, Latin American country immigrants accounted for as much as 46 percent of the total immigrant population. Contrary to conventional wisdom, the highest rate of growth for all major ethnic groups is taking place, not in inner cities, but in the suburbs.
"We know anecdotally that the fastest rate of growth among Latino homeowners is in the suburbs," Acosta says. "We're seeing no growth in the inner city." In May, NAHREP teamed up with AmeriDream, Inc., a provider of down payment gifts, to increase homeownership in the Hispanic community.
Marketers and agencies rethink their work out loud at the 10th annual Ad Age Digital Conference. What is advertising now -- an ad or an experience? How does it get done -- and by whom? We hash out pressing industry issues like ad blocking, ad fraud, and kickbacks. We set the agenda for the year ahead. Save $400 before February 19.Learn more