THE GROWING CHASM | filam millennials, Gen Z and home ownership
I have to admit, buying a home is no walk in the park. It’s long, it’s tedious and your anxiety goes through the roof. I should know, since I recently purchased the house that I’ve been dreaming of since 2019. Backstory, this is my fourth property I’ve ever owned and still…the process is the same: long and tedious, but the outcome is 100 percent worth it. I came across a study by ZipMatch that troubled me. It listed reasons why Filipinos don’t own a home. Even though the article is about Filipinos who live in the Philippines, there’s a big correlation with Filipinos living in America because a lot of the reasons stem from our cultural tendencies around personal finances.
A common topic you’ve probably heard of multiples times is : “Why aren’t young people buying houses anymore?” The answer, according to a recent survey, simply boils down to this: money.
Most members of the Gen Z and millennial generations, including FilAms in that mix – U.S. adults between the ages of 18-25 and 26-41, respectively – do want to own a home one day, or if they had their way, right now. Their biggest roadblock is affordability.
I’m going to share data and tips from a few Filipino-American real estate experts who live and breathe the housing market in hopes it encourages more young FilAms to not give up on their home ownership dreams.
If you have been thinking about buying a home but just don’t know where to start, read on.
Let’s start with the top 4 reasons why Filipino-American homeownership among young, working adults is decreasing. According to surveys and recent polls,
Majority of respondents say they do not have enough savings for a deposit or down.
They are not confident that they will be financially capable of committing to long term mortgage payments.
Their current median salaries don’t allow them to pay for monthly living expenses AND save for a home.
They don’t feel savvy enough to understand the housing market or fear they will make the wrong purchase.
Can you relate to any of these reasons? These are all viable reasons and the most common barriers to becoming a homeowner. Don’t be discouraged. There are lots of benefits to homeownership. To get you excited, here are 10 Benefits of Owning a Home (found on LendingTree.com):
You can control your monthly housing payment
You’ll build home equity with each monthly payment
Your home value will rise over time
You can use home equity to build wealth
You can convert your home equity to cash
You may get a tax deduction
You’ll build credit
You can make the home your own
Your family may benefit from the community you invest in as a homeowner
You may enjoy homeownership health benefits
In the last 40 years, the Asian American and Pacific Islander (AAPI) population in the United States has increased from 3.6 million in 1980 to 18.8 million in 2019. And since 2000, the AAPI population has experienced the fastest growth of any racial or ethnic group in the nation. From 1980, Filipinos jumped from 56.6% to 65.5% in 2019. I’ll consider that a win and proof that young Filipinos can overcome these barriers of home ownership. So let’s get you on that chart!
Keep reading to learn more about what the industry’s finest have to share – this should help diminish your fears. They can help you build a plan to follow. I hope this will leave you encouraged and lead you to start asking the right questions to overcome these limiting factors.
Tip 1: “Decide on what type of home suits you.” - Mark Lorico
Mark Lorico is a multi-award winning agent with a pedigree of success. Everything that Mark does in real estate begins and ends with family. Born in Long Beach and raised in Bellflower California, Mark was introduced to real estate at the age of five by his father, building his family legacy even before he studied Real Estate Finance. His tip for a Filipino Family looking to buy their first home is to decide on what type of home suits you. Will a traditional home with a backyard suit your needs compared to a condo/townhome with less maintenance (even though your parents may say it won't grow as much equity)? Or choosing a two-story home compared to a single-story property because you are mindful that Lola cannot make it up the stairs when she stays over the weekend? And don’t forget about Filipino superstitions such as the one about a house with stairs that lead to the front door. This is known to be a stairway to heaven, which means someone will pass soon once you move in. At the end of the day, it really comes down to what your personal needs are. If it's low maintenance without the backyard, cost-efficient without the bedroom downstairs, or proximity outweighs property placement, that is your decision. Don’t let others influence one of your major decisions in life. Do you!
mark@loricolegacygroup.com
Tip 2: “Find a great, experienced agent that is not afraid to negotiate for you.” - Raquel Quinet
Raquel Quinet, Real Estate Entrepreneur and Investor, has helped thousands of clients buy, sell and invest in over 23 markets. Together with partners, she was the first Female CEO to scale a real estate team business to 8 figures and received the prestigious award of the Fastest Growing Privately Held Companies by Inc. 500. Raquel strongly encourages people to “find a great, experienced agent that is not afraid to negotiate for you. Usually if they are a top agent in the market, they have great relationships with other agents who get the job done. Have them explain the home buying process and what to expect from start to finish.”
Tip 3: “Know where you stand with your finances.” - Christine Almarines
Christine Almarines is a National Real Estate Investor concentrating on rental properties, flipping homes and helping families build wealth through the housing market. Christine and her team have received Top Agent/Group since 2013 and is a recipient of the Orange Coast Magazine Real Estate All Stars Award 2021. Christine says, “The most important tip for a Filipino family looking to buy a house is to know where you stand with your finances, your needs versus want list for a house and create a plan.” Whether your plan is to buy a house now, 6 months or years from now, it's important to educate yourself today. Agreeing with Raquel, Christine also stresses the importance of meeting with an agent who is not only experienced, but educated. It is important to get guidance from a trusted source that can walk you through what to expect from start to finish. This includes out-of-pocket expenses, total monthly payments, other expenses that come with homeownership, what risk factors are, market conditions, contingency plans, etc. One of the biggest mistakes people make when home buying is not meeting with a lender right away and having clarity on a budget. Even if your home buying plans are further out, meet with a lender ASAP so you can learn about your credit and finances. A great lender will not just qualify you, but will create a plan on how you can prepare for your purchase. For example, a great lender will give you pointers on how to improve your credit score, which debts to pay off first (if necessary), how much is needed for a down payment and cash reserves to save for to optimize the best interest rate when it's time to buy.
christine@CARealEstateGroup.com
So with that in mind, before anything else, decide what type of home is best for you. Having a karaoke room is fun, but not necessary – or is it? Once you have clarity on the type of home you’re searching for, build your team. Find a realtor who is patient and open to working on your timeline. Then, find a lender who will help you build your financial strategy and plan. If you follow these steps, you’ll be closer to homeownership! Good luck!
If you find these tips helpful, please leave a comment below or share it. Make sure to share and tag me on Instagram @rose_buado.
Written By Rose Buado
Business and Life Purpose Professional Certified Coach
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