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   ARTICLE   |   From Scotsman Guide Residential Edition   |   June 2017

The Housing Market Is in Transition

To succeed as conditions change, you must stay ahead of the curve

There is one thing that’s constant within the mortgage marketplace: change. It’s inevitable. As the industry evolves, those who are prepared for the changes will not only weather the cycles, but will continue to succeed.

This coming year is no different. Change is on the horizon. As the market transitions, it’s vital for mortgage originators to not only anticipate the future direction of the market, but also to recognize the key homebuyer groups. Otherwise, you won’t be able to keep pace in a competitive arena.

Originators have to have their pulse on the market and constantly look five years down the road. When you’re in tune with the trends, you understand how current issues affect the housing marketplace, which allows you to effectively navigate your business through transitional periods. Knowing the market and taking proactive measures, as opposed to reacting to changes, will mean the difference between being successful and being unsuccessful.

As 2017 progresses, originators have to be prepared to transition toward a purchase market, while keeping in sight the bigger picture. That larger frame encompasses an emerging homebuyer demographic that is dominated by millennials — including Hispanic millennials, or “hispennials.” As this transition takes place, originators need to be equipped to reach the target demographic. Without a strategy geared toward a purchase market, and methods for reaching this new generation of homebuyers, originators may miss the opportunity to succeed.

Target the purchase market




Part of the largest generation of consumers, hispennials are defined as millennials (ages 18-35) who are Hispanic. They represent 21 percent of the millennial generation and are actively engaged in the digital world, spending a great deal of time on their phones and social media.

Source: and the Mars Agency

Existing-home purchases are expected to increase moderately in 2017 — by about 2 percent, to 5.46 million homes — while new-home sales are projected to grow by 10 percent this year, according to The number of first-time homebuyers, however, is projected to jump to 52 percent in 2017, up from 33 percent in 2016, reports. That growth means there is a great opportunity to serve first-time or move-up buyers, many of whom will be millennials, including hispennials.

Since the bulk of the housing market this year is expected to be purchase transactions, originators have to gear their efforts in this direction. That means having a good strategy in place, one that includes establishing solid partnerships with real estate agents.

Realtors are daily working with prospective homebuyers who are actively house hunting, so it is important to become a go-to contact for them when they’re ready to make a referral. This happens by staying in regular communication so you build a relationship over time. If you’re not in touch with real estate agents and consistently following up with previous clients, it will be more difficult to keep your loan volume steady during transitional phases, regardless of the borrower demographic being targeted.

Market toward millennials

As a new generation of homebuyers shapes the mortgage industry, you have to consider whether you’re ready to effectively reach them. Zillow estimates that millennials account for 42 percent of the current housing market, which is more than any other generational group. They’ve not only become the largest generation in size, surpassing baby boomers, but they’ve also become the largest segment of homebuyers.

Connecting with this demographic means understanding the millennial buyer. They’re a tech-savvy, on-the-go generation and want instant access to information. Millennials are true digital natives who have grown up in a digital world. They’ve become the most mobile generation, yet. Hence, originators must reach this buyer online and provide on-demand service.

Hispennials, in particular, rely heavily on digital media, including social media. 

Not being available on mobile platforms can really hurt your bottom line. Eight out of 10 millennials turn to this technology during the homebuying process, so it’s vital to have a mobile-friendly website along with high-functioning apps.

Millennials also are heavy social media users, with about 90 percent of them being active on social media. In order to attract them via social channels, you have to create information-rich content that adds value. This is a well-informed generation, and they tend to do a lot of research, so providing quality content that answers relevant questions is on target with what they want.

For millennials, it’s more about helpful guidance and educational posts, not necessarily impersonal ads that lack real substance. Blogs, how-to videos and informative tips all resonate with this generation and will help you build a solid online brand that resonates with millennials.

Create bilingual content

r_2017-06_Arvielo_spotThe Urban Institute projects that more than half of all new homeowners from 2010 to 2030 will be Hispanic households. Consequently, it is vital that originators have a plan to reach this key homebuyer group. Connecting with them begins with educational marketing. You need to know how they conduct business if you want to meet their needs.

Hispanics tend to have nontraditional credit profiles, and more than 70 percent of them speak Spanish. Thus, originators have to develop workshops geared toward building credit, produce bilingual educational materials and have Spanish-speaking mortgage professionals available, or it will be difficult to reach this group of borrowers. Keep in mind, however, when you’re marketing loans to people who speak a foreign language, it’s important to consider your state laws or seek the advice of an attorney to ensure compliance.

Hispennials, in particular, rely heavily on digital media, including social media. Facebook is the second-most common way for hispennials to get their news. Hence, social media has the potential to be a powerful marketing method if you have the right content. Hispennials stream more than 6 hours of online video content per month — 60 percent more than other demographics — so creating video content specifically designed for a Hispanic audience will help you stay relevant with this important demographic group.

•  •  •

As the market continues progressing, will you be ready? Keeping your business fluid during transitional times is as much about being proactive in terms of market cycles as it is about anticipating borrower needs. Staying knowledgeable and ahead of the curve is the best way originators can remain relevant with the evolving demands in the mortgage industry.


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