2016 has been a tumultuous year for the real estate sector, with the presidential election, Federal Reserve rate hike, and Brexit-spurred interest fluctuations all impacting the housing market in ways that are still playing out. As the new year looms, trends that will shape the industry’s coming months are at the forefront of everyone’s mind.
A Diversifying America
Over 50% of new home formulation is expected to happen in minority communities, according to a recent interview with Quicken Loans CEO Bill Emerson. The changing face of the mortgage industry’s clientele demands new and innovative ways of serving homebuyers. Lenders are seeking to attract more Millennial and minority borrowers with new cost-effective programs like Wells Fargo’s YourFirstMortgage, which provides first-time or low-to-moderate income (LMI) buyers incentivized rates and user-friendly features. Real estate professionals must follow suit. Adapting hiring and marketing practices to serve a wide, diverse constituency is a natural solution to expanding both customer base and profit margins.
Housing prices have seen a jump across the nation over the last year, but income rates have failed to follow suit. This is seen by many as the sign of an upcoming affordability dilemma: homeownership rates have strengthened but not fully recovered since the 2008 financial crisis, and a steady rise in the ticket price of both new and existing properties will hardly help. Whether the problem is due to supply or demand, real estate professionals will have to keep a close eye on housing metrics and associated data to guide their strategies going forward.
Finally, with the Internet an ever-increasing factor in mortgage transactions, lenders and realtors alike must strengthen their cyber-security protocols. The news has been filled with data breaches over the last few years, with the infamous hack of healthcare provider Anthem’s internal records leaking the private information of nearly 80 million users. The medical industry is particularly susceptible to these attacks due to the large amount of sensitive data their systems house. The same holds true for realtors, who thanks to the TILA-RESPA Integrated Disclosure (TRID) rule must now follow an exacting set of standards for providing client information at closing. With the Social Security numbers, birth dates, credit scores and other data of their customers at stake, real estate offices should take top-to-bottom security measures in both their IT and human resource departments.