Demographics are reflected in '90s homebuyers Real estate agents focus on change at annual conference

Opportunities, obstacles abound

'Non-traditional' consumers part of today's market.

September 24, 1995|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

OCEAN CITY -- Typical homebuyers five years ago would have been white, married couples in their mid-30s earning $47,500 a year.

But shifting demographics are reshaping the housing market, prompting Maryland real estate agents gathered for an annual conference here to explore ways to reach the new "non-traditional" consumer.

Buyers today are more likely to be minorities, unmarried, single parents or sharing a home with an aging parent, said Mary Fruscello, executive vice president of the Maryland Association of Realtors.

They're also likely to see major obstacles in their way -- saving for the down payment, cleaning up poor credit or finding affordable housing, agents said.

The good news is that homeownership has come to be viewed as a national priority, Ms. Fruscello said during an education session Thursday, the start of the three-day Realtors conference at the Ocean City Convention Center.

She noted that the Clinton administration this year proposed a plan to boost the homeownership rate to 70 percent in five years. It is 64 percent now. And Fannie Mae and Freddie Mac, both congressionally chartered institutions that buy mortgages, have created loan products targeted at low- and moderate-income buyers, and to those in the inner cities and in underserved areas.

"There's a concentrated national focus now on housing and homeownership that's unprecedented in my memory" in 25 years in the industry, she said.

Some 1,000 real estate agents and brokers gathered to hear the latest on topics such as financing, marketing and fair housing.

A segment of the baby boomers -- those in their 30s and 40s -- is now entering prime home-buying years, Realtors were told.

"They're buying their second or third home, or they will be, and that will create a demand for homeownership," Ms. Fruscello said.

But with a sharp decline in the under-25 population during the 1980s, the buyers of the move-up sellers' homes will likely be non-traditional, she said.

Such buyers include minorities, who have a lower homeownership rate than the general population but make up the fastest-growing segment of the high-income population.

"Minorities for the first time will be far more able to purchase a home," she said. "In many parts of our state, there is a large concentration of minorities, and they are sharing in the growth and affluence."

Non-traditional buyers also include renters and immigrants, for whom homeownership has been found to be a greater priority than among Americans as a whole.

Representatives of Fannie Mae -- the Federal National Mortgage Association -- outlined community lending products that are allowing more people to qualify. The mortgages require less of a down payment, from 5 percent to 3 percent, and allow lower qualifying incomes. They expand the sources for closing costs and allow borrowers to use non-traditional credit reports.

One such product is Fannie 97, a 3 percent down payment loan for buyers who have trouble building up enough cash for a down payment. Nonprofits, government agencies and family members can pay for the closing costs.

Fannie Mae also offers "FannieNeighbors" to increase homeownership in minority and low- and moderate-income communities.

Fannie Mae's "3/2 Option" mortgage allows borrowers to use only 3 percent from their own funds for the down payment while 2 percent can come from a family member's gift, a grant or unsecured loan from a nonprofit group, or government agency.

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