It seems the tide might shift in favor of homebuyers looking to purchase this year, especially where lending availability is concerned. That’s great news for consumers, and it’s a prime opportunity for us to educate homebuyers about their enhanced options.
An example of a progressive initiative to stimulate buying activity is the FHA’s HAWK for New Homebuyers pilot program, beginning Oct. 1. HAWK, which stands for Homeowners Armed With Knowledge, provides FHA insurance discounts to first-time homebuyers who obtain housing counseling and education through HUD. This four-year pilot is a win-win for participating first-time buyers and for you, because your clients will become more knowledgeable about the home-buying process.
This program gives you the perfect lead-in when speaking with potential buyers who’ve been on the fence, especially millennials. As the economy continues to improve and the labor market regains steam, this group of about 85 million people born between the early 1980s and early 2000s is poised to eclipse the buying power of earlier generations.
As more and more millennials enter the workforce, get married and form families, they’ll be thinking about homeownership instead of renting. If you educate these customers on the benefits of housing counseling in order to obtain a discount on their mortgage insurance, you’ll likely have a smoother transaction—and a savvier buyer as a result.
Many of the changes taking place in housing are due, in part, to new blood in key leadership positions at HUD and the FHFA. When the housing market took its downturn, the government put rigid policies in place to regulate the mortgage industry and prevent lenders from doling out loans to people who couldn’t afford them. Some of these misguided policies made it extremely difficult to obtain loans for some potential buyers, particularly first-timers and moderate-income borrowers.
With new leaders at the helm of HUD and FHFA, policy shifts seem to be taking place. As a result, home loans could become more affordable and accessible to a wider spectrum of qualified buyers.
Another positive change in the industry for all homebuyers is increased competition among private lenders. Eager to tap into new avenues of business, lenders are competing for purchase originations in the private lending sector in the wake of the refinancing market’s decline. As a result, banks may start offering more reasonable interest rates and more attractive loan terms for qualified buyers.
Your role as an educator and a fountain of knowledge for potential buyers, particularly millennials, cannot be overstated. Now, more than ever, you have so many ways to reach out and share this kind of encouraging news with your sphere.
Use social media, buyer seminars, email blasts or even idle time in the coffee line to share these informational nuggets with the people you know and meet. As all the variables keep moving in favor of a stronger housing market, your proactive efforts to educate buyers will pay off with more leads—and clients for life.
Margaret Kelly (CRB) is chief executive officer of RE/MAX, LLC.
For more information, visit www.remax.com.