June 21, 2024
Mortgage

What to look for in emerging purchase market


Crunching the numbers to excel in the purchase market

“Currently, we have 50 million people in this country between 30 and 40,” Fratantoni said. “We generate about a million and a half households a year. By comparison, from 2000 to 2015, it was closer to a million a year. So we’re generating 50% more households annually.”

This massive slice of humanity all need housing, he said: “They need to live somewhere,” Fratantoni said. “Whether they’re going to rent or whether they’re going to buy, our industry is either going to finance them directly or finance their landlord. It’s a tremendous amount of housing demand.”

It’s key to understand those demographics while preparing to market to those in that age group as they seek reliable housing: “When it comes to homeownership, we didn’t highlight the 30 to 40 haphazardly,” he said.  “This is truly an interesting range because if you look at those under 35, the homeownership rate is about 38% and when you look at those from 35 to 44, it’s at 63%. For many people, if they’re going to buy a home, this is the age in which they decide to do it.”

While the market has been volatile the last few years, those demographics are shaping up to be advantageous for the industry. “The pandemic put a wrench in lots of plans,” the economist said. “The millennial generation has been late hitting other benchmarks like getting married, having kids, buying cars, all kinds of things. But they’re coming, it’s happening now. And we think this is going to be a strongly supportive force for housing market – again, for the medium term.”

The other demographic to watch: A burgeoning Hispanic market

Candice McNaught, senior vice president of national sales at Supreme Lending, echoed the sentiments. Joining Fratantoni, she suggested her firm is focused on those same age demographics.



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