According to Realtors® and Prospective Home Buyers Across Races and Ethnicities.

The current real estate market’s high home prices and mortgage rates, as well as limited inventory, are the top reasons that Realtors^® and prospective home buyers across races and ethnicities cite as barriers to purchasing a home, according to two new reports from the National Association of Realtors^®.

In partnership with Morning Consult, NAR’s 2023 Experiences & Barriers of Prospective Home Buyers Across Races/Ethnicities report surveyed White, Hispanic/Latino(a), Black and Asian prospective home buyers about their experiences. NAR’s 2023 Experiences & Barriers of Prospective Home Buyers: Member Study surveyed Realtors^® who focus on residential real estate regarding the latest buyer with whom they worked who has not yet purchased a home, and it compares findings with the consumer study.

“Home buyers face the most difficult affordability conditions in nearly 40 years due to limited inventory and rising mortgage interest rates,” said Jessica Lautz, NAR’s deputy chief economist and vice president of research. “The impact is exacerbated among first-time buyers who are more likely to be from underrepresented segments of the population.”

Among prospective home buyers, Asian (27%), Hispanic (24%), Black (20%) and White (15%) respondents say the main reason they have not yet bought a home is because they are waiting for prices to drop. White respondents (15%) are just as likely to say it is because they are waiting for mortgage rates to drop. Additional market-related reasons that prospective home buyers cite as barriers include waiting for mortgage rates to decline (18% - 25% of all four groups) and not enough available homes within their budget (19% - 24% of all four groups).

The top three reasons why Realtors^® say buyers have not yet purchased homes are the same as reported by consumers: not enough homes available for purchase in buyers’ budgets (34%), buyers are waiting for mortgage rates to drop as higher prices affect affordability (18%) and buyers are waiting for prices to drop (9%). These three factors greatly impact affordability since limited inventory drives up home prices and higher rates increase monthly mortgage payments.

Saving for a competitive home down payment is also a primary obstacle for prospective home buyers (6% - 9% of all four groups). In terms of what holds them back from saving for a sufficient down payment, prospective home buyers across races and ethnicities cite as barriers current rent/mortgage payments (43% - 56% of all four groups) and credit card payments (38% - 57% of all four groups). Despite this, awareness about existing down payment assistance programs is low among prospective buyers saving for down payments. Only 8% - 15% of all four groups applied for these programs, 20% - 33% considered but did not apply to these programs, 21% - 32% did not consider these programs, and one-third (30% - 33% of all four groups) say that they are not aware of these assistance programs. For prospective home buyers who are aware of down payment assistance programs, the primary reason they did not apply for them is because they did not know enough about the programs (44% - 58% of all four groups).

Likewise, more than half of Realtors^® (53%) say that at least one issue is holding their latest buyer back from saving a competitive down payment: most likely current rent or mortgage payments (23%) or credit card balances or payments (17%). Further, only 23% of Realtors^® say that their buyers experiencing these challenges have applied for down payment assistance programs. This is most likely because their income is too high (30%), they did not know enough about the programs (19%), or they are worried about the competitiveness of their offers in multiple-bid situations (17%).

“Down payment assistance programs often fly under the radar for potential home buyers. Using programs – like FHA, VA or USDA loans – can make homeownership more attainable. Experts, such as agents who are Realtors^®, can educate potential buyers about these programs. Doing so will bring in more first-time buyers and narrow the racial homeownership gap,” added Lautz.

Discrimination also plays a role in the homebuying process. About one in six (13% - 16% of all four groups) prospective home buyers across races and ethnicities report facing discrimination. More than half of Black (63%), Asian (60%) and Hispanic (52%) prospective home buyers who report this say it was due to their race or ethnicity. Of these, the largest proportions of every group are most likely to report that this discrimination manifests in steering toward or away from specific neighborhoods (36% - 51% of all four groups) and more strict requirements (32% - 48% of all four groups). Despite all of this, most discrimination during the homebuying process goes unreported: 47% - 81% who describe it did not report it to a government agency or legal aid organization. 

 Interestingly, only 1% of Realtors^® who took the survey report that their buyers experienced discrimination during the homebuying process, while 13% are not sure. Those reporting discrimination are most likely to say this is based on race or ethnicity and lay this at the feet of lenders, saying that buyers experienced this in the type of loan product offered (43%) or that buyers did not receive a call back from lender(s) (29%). Of those who report discrimination, 57% report it based on race, 29% report it based on age and 21% report it based on familial status (including marriage or parental status). Just 7% say that the buyer reported the discrimination, which was on the basis of either race or religion or both, to a government agency or legal aid organization.

To help address discriminatory practices in real estate, NAR offers several resources to its members, including Fairhaven, an interactive training simulation based on real fair housing cases; Bias Override, an implicit bias training course with practical tips to override bias; At Home With Diversity, a certification course aimed at serving diverse consumers; and a confidential voluntary self-testing program for brokerages to assess agents’ compliance with fair housing laws. In Washington, NAR advocates for strong fair housing and fair lending enforcement, and policies aimed at closing homeownership gaps among demographic groups.”

C-suite executives and leaders have a lot on their plates when it comes to successful management of their business or organization. They are in control of the organization’s image, a diverse team of individuals with diverse talents coming together to complete specific tasks, and the successful and timely implementation of multiple projects at any given time.

That is a lot to be responsible for, but as we all know, change is the only constant in the business world. My Anticipatory Organization® Model notes that digital disruption is starting to alleviate some of the need to manage traditional tasks that managers and other business leaders have long managed before. With this transformation, the tasks of managers and business leaders alike are starting to change as well.

What some leaders overlook now is their actual role as managers — the management of perception and distraction.

Perception and Distraction Affect Your Organization

Perception refers to how you and your employees view projects, the company, and customers. Conversely, perception is how customers view your company, its products, and how you solve their own troubles. How each of these elements interact with one another is a determining factor in the significance of your organization and, likewise, how perception turns into reality.

Put simply, perception originates internally and then extends outward. This implies that perception, much like disruption in an Anticipatory Organization, is within your control and can be managed by you and your team. The way you perceive yourselves and your team has a profound impact on your actions, strategies, and the success of the products you introduce.

These actions and products then determine the value customers attach to your organization and how they distinguish you from the competition. It does not happen the other way around. As such, the way you manage perception becomes either an asset to your organization or terribly detrimental!

Now, let’s shift our focus to managing distraction. Unlike perception, which involves creating transformation from the inside out, distraction often originates externally and moves inward, manifesting as disruption and change. Uncontrolled disruption becomes a distraction in its own right, diverting your attention from what truly matters and forcing you, as a leader, to handle crises with agility as an afterthought

So, since perception and distraction are what must be managed more frequently by the business leaders and managers of today, how can this be done to your strategic and competitive advantage instead of leaving them to cause you the stress of setbacks?

Skipping Problems with a Change in Perception

Perception often originates from within the organization, making it vital to see your team as a competitive advantage and a strategic asset for the business. Your team, comprised of critical thinkers and hardworking individuals, plays a significant role in the development and implementation of new products and services. It all starts with you, the business leader, viewing your team through this lens, which, in turn, will incentivize your employees to recognize and act as the valuable asset they truly are.

How does this impact perception of products, services, and customers? By becoming a positive outlook on the organization itself, the adjustment in perception affects how your employees perceive problems they encounter both at the organizational and customer level, tying in with my Skip It Principle.

Do customers perceive a product as being too pricey? Is your company software too slow? Or is it something different entirely? Having a team with a properly managed internal perception helps them effectively challenge the perceived problems that may be holding your organization back as a whole, especially since a perceived problem is not always the real root issue.

Venmo — an app owned by PayPal — allows friends, family, and others to exchange money electronically with no fees. To begin, Venmo had few users, but why was that? Was it a lack of necessity for customers? Was the app difficult to use? These were the questions facing the internal teams at PayPal.

While these questions were concerning, leaders and employees at PayPal refined their perception to skip those perceived problems and instead focus on the opportunity at hand. Customers liked the app, but what they needed most was convenience.

Thus, they launched a marketing campaign on how to use Venmo in stores with just a smartphone. No more need to go to ATMs for cash or carry countless credit cards, as Venmo does it all safely. As a result of this change in their perception of customer needs, Venmo exploded in popularity, becoming one of the most used apps for exchanging money.

Jump to Manage Opportunities Instead of Distractions

Because distractions come from outside of your organization in the form of various disruptions and changes, suddenly a business leader’s attention is held hostage and they have to crisis manage more frequently. Unfortunately, too much crisis management as a business leader shifts the company into neutral, where they become vulnerable to disruption rather than in control of it.

Instead of a reactive approach that involves managing disruption as it happens to avoid distraction, true industry leaders and innovators adopt my Anticipatory Leader approach, which centers on proactively staying ahead of disruption. I’ve taught this approach to many, and it has proven to be highly effective.

The Anticipatory Leader approach leverages Hard Trend future certainties with Soft Trend future possibilities to anticipate disruptions before they occur, turning disruption into opportunity. This doesn’t just minimize distraction, it allows leaders to manage opportunity instead!

Palo Alto Networks is a cybersecurity business that was founded using anticipatory thinking about the internet and digital technology. The need for businesses to protect classified information online is a Hard Trend future certainty, which the founders of Palo Alto Networks recognized and capitalized on as an opportunity to successfully launch their cybersecurity business.

What would have happened if the founders at Palo Alto Networks were left distracted by trying to avoid the issue of security breaches instead of pre-solving the problem the way they did? They likely wouldn’t exist!

In today’s era of transformation, prioritizing the management of a business or organization’s perceptions and distractions is crucial. However, it’s important to recognize that business leaders and managers have more on their plates to manage. While embracing digitally disruptive technology can streamline certain mundane tasks, effective management also entails attending to the very human aspects of leadership.

Take action now and prioritize fostering critical thinking within your team! Empower them to find a deep sense of significance in their contributions to the organization. This will be the key to staying ahead of disruption and minimizing distractions. Act today for a more innovative and focused future!