Every June we acknowledge National Homeownership Month and look at the state of the mortgage industry. While it’s good to focus on homebuyers and homeowners at this time, this month also provides a good opportunity for us to do some industry soul-searching and ask ourselves: Are we giving consumers a reason – and the confidence –to buy?
We can’t assume that consumers will automatically understand the value of buying a home as opposed to renting. In fact, a Freddie Mac survey found that 55 percent of renters surveyed in March like where they live and didn’t plan to move even if their rents were to rise. Think about that. More than half of respondents would rather spend more money on rent than start building wealth by buying a home.
Statistics like that show us that we are not doing a good enough job as an industry at selling the virtues of homeownership. We have to explain to consumers why they should consider buying a home now. For example, we must tell them that interest rates are in homebuyers’ favor and home prices are still affordable. We can’t assume that they understand that they may be missing out on a great time to buy a house.
We also have to let them know that there are resources available such as down payment assistance, which can help them to amass the funding that they need to achieve the dream of homeownership.
Finally, we have to address the issue of confidence. Many prospective homebuyers choose to continue renting because it’s familiar and comfortable to them. The idea of buying a house seems overwhelming because they don’t know what steps to take. Others might put off homeownership because they have made financial mistakes and they are unsure exactly how to fix them.
Financial education can give consumers the confidence they need to make the leap from renter to buyer. Non-profit homeownership advisors can help them to understand how to improve their finances so that they are able to get approved by lenders, and advisors can also walk homebuyers through the process so they are not overwhelmed.
When it comes to promoting homeownership in the communities that we serve, we can’t wait for consumers to come to us. We must meet them where they are and let them know why homeownership is a path that they would benefit from pursuing.
Then we must give them the support – and the confidence – to complete the journey.