New Report Says Declining Home Prices Woo New Buyers to Housing Market
Wednesday, September 10, 2008
The housing boom of 2004 and 2005 led to a bust that's worse than most expected. Home prices are still falling, foreclosures rising, and homeownership rates are starting to drop.
Still, global market research firm Mintel, headquartered in Chicago, says it sees golden opportunities in this dismal market in young adults and minorities. Mintel’s latest mortgage report suggests Echo Boomers (currently aged 13-30) and Hispanic, Asian, and Black Americans will be key to the real estate market’s turnaround.
“As home prices fall, we see more first-time buyers stepping up,” explains Susan Menke of Mintel. “Those who couldn't afford to buy during the housing boom — and now have nothing to sell — are taking advantage of lower prices. Lenders should focus on first-time buyers, especially Echo Boomers and minorities, to pump life back into the mortgage market,” Menke said.
Mintel's findings show homeownership rates rising fastest among young adults and minorities. In 2007, nearly 25 percent of under-25s owned a home, up from 16 percent in 1990. Likewise, 51 percent of Hispanic, Black and Asian Americans owned homes in 2006, rising from 44 percent in 1995.
Mintel’s consumer survey revealed that more young adults and minorities plan to buy a house in the next five years. Though just 23 percent of the general population plans to buy, 38 percent of adults aged 18-24 and 39 percent of those 25-34 say they will, Mintel said. Across age groups, Mintel's data shows more Asians (42 percent), blacks (37 percent), and Hispanics (30 percent) say they will buy a home in the next five years than whites (20 percent).
“Young adults and minorities represent tremendous opportunity,” Menke commented. “Echo Boomers comprise a quarter of today’s population and span two decades; minority groups are some of the fastest growing in the United States. By helping these individuals prepare for future homeownership, lenders can tap their demographic power and lead them to eventual home-buying success.”
Still, global market research firm Mintel, headquartered in Chicago, says it sees golden opportunities in this dismal market in young adults and minorities. Mintel’s latest mortgage report suggests Echo Boomers (currently aged 13-30) and Hispanic, Asian, and Black Americans will be key to the real estate market’s turnaround.
“As home prices fall, we see more first-time buyers stepping up,” explains Susan Menke of Mintel. “Those who couldn't afford to buy during the housing boom — and now have nothing to sell — are taking advantage of lower prices. Lenders should focus on first-time buyers, especially Echo Boomers and minorities, to pump life back into the mortgage market,” Menke said.
Mintel's findings show homeownership rates rising fastest among young adults and minorities. In 2007, nearly 25 percent of under-25s owned a home, up from 16 percent in 1990. Likewise, 51 percent of Hispanic, Black and Asian Americans owned homes in 2006, rising from 44 percent in 1995.
Mintel’s consumer survey revealed that more young adults and minorities plan to buy a house in the next five years. Though just 23 percent of the general population plans to buy, 38 percent of adults aged 18-24 and 39 percent of those 25-34 say they will, Mintel said. Across age groups, Mintel's data shows more Asians (42 percent), blacks (37 percent), and Hispanics (30 percent) say they will buy a home in the next five years than whites (20 percent).
“Young adults and minorities represent tremendous opportunity,” Menke commented. “Echo Boomers comprise a quarter of today’s population and span two decades; minority groups are some of the fastest growing in the United States. By helping these individuals prepare for future homeownership, lenders can tap their demographic power and lead them to eventual home-buying success.”
