Homeownership has historically been dominated by white Americans, but the face of homeownership could change dramatically in the next few decades. New opportunities are arising for the real estate and mortgage industries to help minority groups achieve their homeownership goals, according to First American Financial Chief Economist Mark Fleming.
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Although homeownership rates have dropped to generationally low levels, growth in some minority groups will drive increases in household formation — and ultimately, household demand from those groups, said Fleming, who leads an economics team responsible for analysis, commentary and forecasting trends in the real estate and mortgage markets at the title insurance, settlement services and data solutions provider.
First American also announced this week that it has launched a new online resource that will focus on Fleming’s perspectives on the economic and cultural trends shaping American homeownership.
The website will contain research on homeownership trends, presentations from policymakers and business leaders and data-driven white papers and research.
According to one of Fleming’s white papers, “The State of Homeownership: Homeownership, Economic Mobility and the Challenges Facing the Nation’s Latino and African-American Communities,” homeownership rates are dropping across all ethnic groups, and fewer Americans are benefitting from the economic, financial and social advantages offered by homeownership.
However, with the U.S. Census predicting that minorities will become the new “minority-majority” by 2045, homeownership rates among minorities are expected to increase, Fleming said.
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“Based on the propensity for homeownership by age and ethnicity combined with the forecasted changes in population, it’s possible to estimate homeownership rates by ethnicity,” Fleming said.
In particular, Hispanics are expected to be the fastest-growing ethnic group, and will account for more than a quarter of the total population by 2045, Fleming predicted.
Hispanics will double the population size of the next closest minority group, African-Americans. Although many Hispanics are too young to be expected to pursue homeownership, “their time will come,” Fleming said.
“Millennials of all ethnicities are becoming more educated any prior generation and will have increased earning power as a result,” he said. “Understanding the trends that influence homeownership decisions today and in the future can help inform the discussions necessary to preserve homeownership opportunities for the next generation.”
