The housing market of 2020 is changing demographically, said Anna DeSimone, the author of Housing Finance 2020.
“The year 2020 is a demographic turning point,” said DeSimone. “It begins a new decade. The demographics are changing, so that there will be more Hispanics, Asians, just a more multicultural homebuying market,” she said. DeSimone predicts the fastest-homebuying market will be Hispanic residents.
DeSimone said affordability is unique across demographics, but she believes interest rates will remain on the lower side, as they have been over the past five years. “People are spending half of their income to cover housing costs, and they need to find out about all possible money-saving solutions,” she said.
“The cost of housing keeps escalating,” she added. “Appreciation across the country is in the 5 to 7% range. When you have an average home price of $220,000 nationwide and the median household income is $72,000, people can’t afford to borrow that much on their income. That is the challenge. We need to keep interest rates low, but have mortgage programs that give the buyers more flexibility.”
For Realtors® working with buyers outside of their own demographics, DeSimone recommends doing some research. For example, in Hispanic culture, homebuying is more likely to be a family event across generations, often including parents and grandparents. “Having handouts in Spanish will help older generations, who may be helping with the purchase of the property,” she said. “They may be intimidated by the homebuying process here. Have an office filled with materials that customers can take away to make them more comfortable.”
“A real estate agent is in a great position to get and keep that conversation going,” added DeSimone.