Diversity as a Competitive Advantage in the Mortgage Industry

The world as we’ve known it has been shifting, and so are the needs of the mortgage industry. We’ve seen record-low interest rates throughout 2020, a surge in mortgage refinances that outpaces the bandwidth that many lenders can handle and — due to the coronavirus outbreak — an extended homebuying season. 

America’s demographics are also changing. Non-white Americans with various ethnic backgrounds are projected to make up a majority of the population by 2044, according to data from the U.S. Census Bureau. 

With all these moving parts in mind, it’s more critical than ever that mortgage business leaders shift their mindset around diversity, and begin to view it as a competitive advantage. Let’s get into three reasons why. 

Diversity is defined as the “inclusion of different types of people (such as people of different races or cultures) in a group or organization,” according to the Merriam Webster dictionary. 

Inclusion, on the other hand, is the “act or practice of including and accommodating people who have historically been excluded.” Those exclusions might be attributed to their ability, ethnicity, race, sexuality or other characteristics. 

Having a diverse workforce enhances your ability to mirror the community you serve. It demonstrates your commitment to connecting with the people within your immediate reach. 

A mortgage company that values diversity and inclusion may also find a talent pool with more depth, especially at a time when the industry is looking to fill tens of thousands of jobs. 

Mirroring the community also matters from a consumer standpoint in terms of increasing access to homeownership. During the third quarter of 2020, the national homeownership rate was 67.4%, according to data from the U.S. Census Bureau. When broken down by race and ethnicity, the rates were: 

• Black homeowners: 46.4% 
• Latino or Hispanic homeowners: 50.9% 
• Asian, Native, Hawaiian and Pacific Islander homeowners: 61% 
• White homeowners: 75.8% 

Implementing a more diverse and inclusive working environment can help you better understand what work needs to be done to create more homeowners and close the homeownership gap. 

Incorporating more diversity into your operation can also positively influence your bottom line. Research has shown that companies who are intentional about diversity have a cash flow that is 2.3 times higher than those who don’t. Additionally, more than two in five companies (43%) noticed a boost in their profits, due to having culturally and ethnically diverse boards. 

Diverse companies are also 45% more likely to report growth in their market share year over year, and are 70% more likely to report they’ve captured a new market. 

It can be difficult to make sound decisions and grow your business if you haven’t yet pivoted to diversify your talent pool. You’ll also limit the potential you’re able to reach by operating within an echo chamber. 

Focusing on diversity and inclusion can lead to greater creativity and innovation within your company, which means you leave fewer stones unturned to drive the business results you’ve outlined and are working to achieve.