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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 40 April 2024 E X P E R T I N S I G H T S rates. In fact, the U.S. Census shows homeownership continues to decline for all Americans; the rate recently dropped to 63.1%, the lowest point since 1970. The trend is more troubling among diverse communities. A 2021 National Association of Realtors (NAR) study found the homeownership rate among Black Americans (43.6%) and Hispanic Americans (50.6%) significantly lags be- hind Asian Americans (62.8%) and white Americans (72.7%). Gwen Garnett: In order to understand the current state of housing, we must understand the impact of the past. Historical policies and practices, such as redlining, made it more difficult for minority communities to buy homes in certain areas. Even though these policies and practices are now illegal, with home- ownership considered a building block to creating generational wealth, many individuals and families from minority communities are forced to start the home buying process with fewer financial resources at their disposal. This makes homeownership still feel unattainable, particularly for first-time homebuyers. Q: How can the mortgage and financial services industries drive change? Garnett: Stay the course. Too often, mortgage assistance programs are pulled together in a piecemeal fashion, and unfortunately, viewed through a transactional lens. There's an expectation for immediate results, but change takes time. Programs designed to create a path to homeownership for low- and moderate-income communities need to offer sustainable solutions. Let's take some of the down payment assistance programs. Sure, these programs help individuals and families from diverse communities access the funds to take out a mortgage, but homeownership is much more than a down payment. Families need to pay property taxes, save money, put food on the table and account for eventual maintenance and repairs. Pushing for programs that address the challenges that many families experience when it comes to remaining in their homes is a positive step forward. Lewis: Beyond providing access to financial resources, making educational materials available can have a significant impact. Experian recently conducted a survey comparing the home buying experiences of Black, Hispanic, and white consumers, and one barrier for Black and Hispanic consumers aspiring to become home- owners is not knowing where to start. Moreover, 58% of Black and Hispanic consumers who were denied a mortgage didn't know what they needed to do to get approved in the future. Navigating the homebuying process can be difficult, even if you are familiar with the financial services industry. Take the time to assess the knowledge gaps and common questions that individ- uals may have about certain financial products. Partner with organizations that have relationships with underserved communities and listen to the challenges they face. Perhaps, most importantly, cater your educational materials to your audience. Everyone enters the home buy- ing journey at a different stage; the more relevant we can make the information, the more helpful it will be. Q: What role does financial education play in closing the homeownership gap? Garnett: Effective financial literacy can provide individuals and families from diverse communities with the knowledge to navigate the housing market. For example, HomeFree-USA has a program that prepares renters for mort- gage approval and sustainable homeown- ership through personalized financial guidance and credit counseling. Our intermediary network oversees 53 affiliated community- and faith-based housing counseling agencies across the nation. These agencies play a powerful role in of- fering on-the-ground learning and service assistance to underserved communities and prospective homebuyers. Lewis: Helping families buy a house is one thing, but making sure they're equipped to leverage that asset to build generational wealth is another. Far too many families secure enough money for a down payment, only to realize they didn't account for other expens- es. Financial literacy is a journey, and homeownership is just one stop along that journey. Basic financial concepts, including building and maintaining good credit, budgeting, and saving, as well as deducting your mortgage interest from your taxes, will better position home- owners for the long-haul. "Navigating the homebuying process can be difficult, even if you are familiar with the financial services industry. Take the time to assess the knowledge gaps and common questions that individuals may have about certain financial products." —Wil Lewis, Global Chief Diversity, Equity, Inclusion & Talent Acquisition Officer, Experian