BOSTON — With home affordability at record highs, one analyst believes now may be the time to target younger people in the mortgage market.
Tracy Ashfield, founder of Strategic Mortgage Solutions, noted that the average starter home's price nationwide now sits at $143,700 with an average monthly payment of $727, a far cry from the $1,100 average payment at the peak of the market. Even in an environment where credit is tough to come by, a member with an annual income just under $40,000 can get a prime rate, Ashfield said.
"Are you really out there looking for that first-time homebuyer? Because I would contend you have a real opportunity there," said Ashfield.
CUNA Mutual Group Economist Dave Colby agreed. "It's a historically good time for young couples and individuals to get into the real estate market. I think credit unions can take advantage of that," he said.
Though the federal tax credit for first-time homebuyers is set to expire late in the year, it is still worth trumpeting the "free money" in advertisements, especially those geared to the younger people who may not have enough saved for the downpayment.
"Between now and Nov. 1, the best way to reach those Generation Y'ers that are would be first-time buyers, and all first-timers, for that matter, is to help them use the $8,000 first-time homebuyer tax credit for a portion of their downpayment," Dan Green, EVP with Prime Alliance Solutions, told Credit Union Journal. "Eight-thousand dollars is a lot of money; $8,000 free money makes it seem even bigger,"
Though their pull may be dwindling in a rough housing market, forming solid relationships with local Realtors is key to churning out additional real estate lending volume, according to Bob Dorsa, president of the American Credit Union Mortgage Assocaition.
Despite increasing mortgage marketshare to 5% from 2% in recent years, credit unions are still at square one when it comes to informing the public they do home loans, he suggested.
"Tell a Realtor you want to buy a house and finance it through a credit union and see the body language. They'll look at you like they're crazy," said Dorsa, who encouraged CUs to be aggressive when getting staffers into the community and meeting personally with Realtors. Once they understand credit unions' potential role in the industry, they'll be more apt to spread the word without costing cooperatives a dime or a minute of additional effort.
"To me that's the simpler way than try to convey the message to all Americans that they are as good as (the big banks)," said Dorsa.
