Increasing the Homeownership Rate as a Boost to the Economy

REALTORS® across Southwest Florida and throughout the United States are dedicated to promoting homeownership opportunities and the elimination of hurdles to achieving the American dream of owning a home.

“As REALTORS®, we work every day to help people realize the American Dream of owning their own home,” says 2017 Florida REALTORS® President Maria Wells.  “Opening the door to homeownership helps families find security and stability.  While buying a home is usually the biggest financial investment someone may make in their lifetime, it also offers a sense of place and community.  Our homes hold our hopes, our memories and our dreams for the future.”

Extending a long-standing tradition, President Donald Trump has declared June as National Homeownership Month and has announced his support to the goal of increasing the U.S. homeownership rate.  According to the declaration:  “For generations of Americans, owning a home has been an essential element in achieving the American Dream.  Homeownership is often the foundation of security and prosperity for families and communities and an enduring symbol of American freedom.  This month, we recommit to ensuring that hard-working Americans enjoy a fair chance at becoming homeowners.”

The continued recognition of June as National Homeownership Month inspires everyone within the real estate and housing industries to continue to promote homeownership as an important contributor to economic strength and to increase the number of homeowners, especially amongst minority groups.  According to the most recent United States Census data reported, the homeownership rate in the state of Florida for the first quarter of 2017 was 64.6 percent, while the homeownership rate for the entire nation was 63.6 percent for the same period of time. 

Wells impressed the fact that homeownership serves as a foundation for communities, instilling pride and a sense of belonging among individuals within the communities.  Research indicates that homeownership provides both tangible and intangible benefits to the economy, community and the individual homeowners. 

Recognition of homeownership first began as a week-long celebration in 1995, and was later extended to the entire month of June by President George W. Bush in 2002. 

Sellers Adjusting Pricing to Market Value in Southwest Florida Real Estate Market

The single-family housing market in Southwest Florida has continued to see sellers modifying their pricing to match current market value. These modifications to pricing to current market value have resulted in a decrease of the average median home prices in Southwest Florida and have helped to increase pending sales activity. This practice amongst home sellers in Southwest Florida is projected to continue and is expected to continue to boost sales activity in the area as we move forward through the remainder of 2017.

In contrast, the condominium market in Southwest Florida is still showing many units priced high and in need of price adjustments. This has had an impact on the average days on the market for condominium homes. As summer approaches and seasonal buyers are expected to return to the area for the summer selling season, condominium homeowners are anticipated to make the price adjustments necessary to attract buyers who are looking for properties listed at fair market value versus overpriced units.

Housing market reports indicate the number of overall closed sales in the Bonita Springs-Estero area within Southwest Florida, including single-family homes and condos, increased to 2,989 units for the 12-month period ending in April 2017. This is compared to 2,965 units for the 12-month period ending in April 2016. Pending sales for April 2017 were at a 7 percent increase with 3,098 units when compared to 2,902 units in April 2016. Activity narrowed slightly for the Naples area, when compared to the strong end to the first quarter of 2017, as pending sales for the 12-months ending in April 2017 showed a 3 percent decrease. Closed sales showed a 4 percent decrease and inventory, in contrast, showed an 8 percent increase. Again, continued price adjustments and the beginning of the summer selling season are expected to boost the housing market in Southwest Florida in the coming months, offering a positive outlook for the area’s residential real estate market.

Hispanic Homeownership Influence Exceeds National Statistics

Hispanics have a strong influence in homeownership, exceeding national statistics as they purchase homes at an increased rate for the second consecutive year. 

According to the National Association of Hispanic Real Estate Professionals’ (NAHREP) recently released 2016 State of Hispanic Homeownership Report, the Hispanic homeownership rate increased to 46 percent last year, in spite of a decreasing overall rate of homeownership across the nation.  The Hispanic homeownership rate was 45.6 percent for 2015 and 45.4 percent in 2014.  Over 7.3 million Hispanic households owned their homes in 2016, with 330,000 new households added – 38 percent of all households formed.

The drivers that are compelling Hispanics to purchase a home are the pursuit of the American Dream and the fact that the majority of Hispanics view homeownership as a viable investment vehicle for building wealth, as well as the ideal for raising children. “The significance of a strong desire for homeownership cannot be overstated,” the report states.  “Where there is a will, there is generally a way.” 

More members of the real estate industry are also working to meet the unique needs of Hispanic homebuyers, particularly in terms of obtaining financing.  “While the Hispanic market has outgrown the ‘niche’ segment designation, the housing industry is just beginning to fully recognize its significance to the vitality of the overall market and is responding with products and services that are more relevant to the needs of Hispanic consumers,” states the report, citing recent initiatives spear-headed by Bank of America, Fannie Mae and Freddie Mac, and Wells Fargo. 

Some hurdles to Hispanic homeownership, such as financing and a lack of knowledge regarding Hispanic cultural norms amongst members of the housing industry, still exist.  “Hispanics tend to reside in a multigenerational household of a typical nuclear family and include additional family members like grandparents or other adult relatives, all of whom contribute to household expenses,” the report states.  “These influencing factors are interconnected with their culture and affect how they bank…Access to culturally competent real estate and mortgage professionals who speak Spanish and can recommend appropriate solutions to meet their needs creates a level playing field.”

For real estate professionals, Hispanics signify a sustainable and massive opportunity.  Ninety percent of Hispanics favor owning a home over renting one in the future, and 62 percent are more likely to purchase a home than rent one upon their next move.  In 2016, Hispanics had a purchasing power of $1.4 trillion – a number that will continue to grow as incomes and Hispanic-owned businesses increase and expand.