According to recent MBA forecasts, loan originations will drop in 2017 by about 15%. This shouldn’t be a big surprise.
This decline is mainly due to a drastic decrease in refinances, resulting from the gradual rise in rates, and a potential for a rate spike, if the Fed discontinues purchasing mortgage-backed securities.
Although forecasts are for a stronger economy driving more home purchases, this will not be enough to offset the decline from fewer refi’s. The new purchase market faces its own challenges resulting from rising home prices leaving fewer affordable homes on the market.
So, where will you get new business?
One place to look is in the Hispanic community. Hispanic homeownership accounted for almost 75% of the net growth in overall US homeownership.
The rate of homeownership among Hispanics increased in 2016 by 0.4%. This may seem small, but across the US as a whole, homeownership rates declined by about 0.7%, to their lowest levels in 51 years!
Further, between 2010 and 2016, Hispanics represented an increase in the labor force of about 76%. They have the highest labor force participation rate than any other demographic at 66%.
This shows that this group represents some major opportunities for Realtors and mortgage lenders in 2017 and beyond.
To service these buyers, lenders need to have the products to serve their needs, like the Fannie and Freddie low down payment programs, along with FHA financing.
Also, have an understanding of the Hispanic culture and language. This is a bilingual community of which about 60% are of the Millennial generation or younger.
Hispanics have a strong work ethic, a commitment to family and community, and a desire toward homeownership. These are a great foundation on which any lender can build a lending program to assist them is reaching their goal.
So, when you’re out looking for new business, don’t overlook the Hispanic community. If you do you just may miss the best lending opportunities of the year.