A generation of potential homeowners have seen their buying power fizzle out in an age characterized by stagnant wages, increasing income disparity and a student debt crisis. Because of these circumstances, homeownership among millennials is eight percent lower than preceding generations at the same age. Frere Enterprises, a company that helps digitally transform businesses for the modern day, anticipates blockchain technology will soon disrupt the housing market and give younger Americans a greater chance to invest in real estate.
“Blockchain is more than cryptocurrencies and ICOs,” Frere Enterprises CEO Brandon Frereexplained. “Really, it’s a technology that could have so many applications that we’ve only scratched the surface of what it can do.”
Low homeownership among millennials is not because they do not value owning land — 86 percent of millennials believe buying a home is a good investment — but instead because of the financial factors inherent in a world that has priced many young people out of the home-buying market. On top of the overarching socio-economic factors that have defined America since the Great Recession — read: low wages, income disparity and massive student loan debt — the home-buying process also forces many out of the market. Currently, even if potential buyers have the money to consider homeownership, transaction costs can be the final piece of a puzzle that keeps them renting rather than owning.
Home buyers typically pay between two and five percent of the total cost of the home for closing costs, and Zillow lists 27 different fees that a buyer may have to pay. According to the National Association of Realtors, the median down payment on a house for a first-time buyer is seven percent. This means closing costs could increase the median down payment by over 70 percent.
Enter blockchain technology into the picture. If real estate is linked to a cryptocurrency, the physical asset becomes liquidized in a way traditional real estate cannot be. Buyers could invest in real estate one coin at a time, gaining a higher level of ease into the marketplace and the ability to trade equity at any time without the normally associated costs.
Real estate-backed cryptocurrencies could essentially cut back on the litany of fees associated with closing costs. Because blockchain technology allows cryptocurrency transactions to be transparent, immediate and secure, investors may potentially use cryptos backed by housing assets to invest in real estate without the necessary closing costs of a traditional home purchase.
“Everybody is waiting to see where cryptos go and what they do … but we all know blockchain technology is here to stay,” Frere commented, “and changing the housing market sounds like a great way for blockchain to continue as a disruptive technology.”
About Frere Enterprises
Run by CEO Brandon Frere, Frere Enterprises is a California-based company with a global vision based around the usage of special financial technology, or SpecFinTech, with a current focus on financial wellness and productivity.
He has designed and created multiple companies to meet the ever-demanding needs of businesses and consumers, alike. Frere’s website, is used as a means to communicate many of the lessons, fundamentals and information that he has learned throughout his extensive business and technological endeavors. Through Frere Enterprises, he aims to apply those lessons to other business opportunities.
Frere Enterprises’ mission is to acquire traditional businesses and digitally transform them to meet and exceed modern day demand. This mission seeks to transform such businesses by developing the newest and most evolved technologies to speed up the evolution of financial services in order to meet the demands of the modern consumer and exceed the potential of the modern era.