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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 34 July 2023 F E A T U R E TIME TO DOUBLE DOWN ON THE CONSUMER EXPERIENCE The sales numbers may not be where lenders would like to see them yet, but people do want to buy, according to new research. Here's what homebuyers are saying and what lenders can do to win their business. B y M A T T H E W W O O D H O U S E I t's a challenging time for consumers to buy a home. Mortgage rates have continued to tick back up toward the 7% mark, with the 30-year fixed rate at 6.79% as of June 1, and even in regions where home prices are coming down (primarily the South and West, according to the National Association of Realtors (NAR)), fierce com- petition among prospective homebuyers is pushing those figures higher. Inventory scarcity continues to be an obstacle as well, although the news of a 7.2% month over month (1% year over year) increase posted at the end of April holds the promise of kicking off a new upward trend following eight months of decline. Even more promising is the resilience homebuyers have demonstrated by turning to new construction in the face of limited inventory: while NAR reports that existing home sales decreased 3.4% month over month (23.2% YOY) in April, the U.S. Census Bureau and the Department of Housing and Urban Development report a 4.1% increase (11.8% YOY) in new home sales. That's the kind of intrepid spirit reflected throughout the 2023 ServiceLink State of Homebuying Report (SOHBR). Released in May, this report features data from a survey of 1,000 individuals who either purchased or tried to purchase a home within the past three years. Its findings reflect a remarkable level of consumer optimism. For example, more than half (52%) of respondents surveyed said they would be open to purchasing a home in this challenging climate, and 44% of homeowner respondents said they plan to take out a home equity loan this year. The question for lenders is how to ensure they capture a sizable piece of this action to maximize their origination volume in 2023. Ac- cording to the SOHBR, the key lies in connect- ing with these enthusiastic homebuyers and homeowners where they are and providing the kind of mortgage experience they crave—an experience where technology, transparency, and education play central roles. Homebuyer Behaviors, Attitudes, and Generational Trends H aving a firm grasp of who customers are and what they want and need, lays a solid foundation for lenders to evaluate their current customer experience and identify op- portunities for improvement. Beginning with who they are, the SOHBR uncovered some interesting trends: » Millennials (born 1981-1996) top the list of consumers considering purchasing a home or taking out a home equity loan. A major- ity of millennials surveyed—61%—said they will consider purchasing a home this year. Forty-nine percent said they plan to take out a home equity loan in 2023. » Other generations are interested in home equity loans, too. Forty-four percent of Gen X (born 1965-1980), 41% of Gen Z (born 1997-2012), and 12% of baby boomers (born 1946-1964) say they plan to tap into their home's equity this year. Home equity continues to be a potential strong revenue driver for lenders. » Although smaller in numbers than the millennial generation, Gen Z is emerging as another mighty force in the real estate market. These younger buyers are eager to secure homes and are poised to make their mark on the industry. » Even as younger generations continue to make their mark on the homebuying market today, it is the members of Gen X who are serving as thought leaders in the growing auction space. Nearly half (46%) of Gen X respondents said they would consider buying at auction (compared with 39% of millennials and Gen Z, and 30% of baby boomers). Gen X's confidence in tak- ing a nontraditional approach to buying may stem from their years of experience in the real estate space. M A T T H E W W O O D H O U S E is Managing Director, Valuations at ServiceLink, the nation's premier provider of digital mortgage services to the mortgage and finance industries.