Today's U.S. housing market is made up of a variety of homebuyers, including retirees looking to purchase second homes and 72 million Millennials.
According to the National Association of REALTORS®, Millennials (ages 23 to 41) represent 43% of the total national home buying market (up from 37% in 2021), the most of any generation today. In contrast, members of Generation X (ages 42 to 56) represent 22% of homebuyers, while Baby Boomers (ages 57 to 75) represent 29%.
Even with high-interest rates, equally high home prices, and limited inventory currently affecting loan originations, there is a significant opportunity for lenders to reach the high percentage of Millennial homebuyers. To do so, lenders must expand their origination channels, as well as ensure they offer easy point of sale applications and digital lending processes to attract mortgage borrowers.
Millennials tackle homebuying differently than previous generations, and since they represent the largest group of homebuyers, lenders need to accommodate their preferred styles of engagement whether it be via mobile, online, chat, text, call centers, or in person.
Mortgage lenders who want to continue producing loans in a challenging market know that digital lending is the way forward. Since Millennials – and likely members of other generations – search for and apply for mortgages online, lenders must implement technology now that makes the process of buying a home easy and stress-free for their customers.
You Don’t Need Another Technology Solution – You Need a Partner
Thriving in this environment of "higher interest rate, slower mortgage origination volume, reduced revenue/margin compression, increased cost to originate, and shortened cycle times" is requiring lenders to invest in new technologies, according to Stratmor Group, a mortgage industry advisory firm.
Choosing a single solution loan origination software (LOS) partner over a fragmented approach to automating end-to-end digital lending processes enables lenders to qualify and approve loans quickly, ultimately saving themselves and their borrowers time and money.
With a flexible web-based LOS offering open application programming interfaces (API), lenders can integrate with a vast ecosystem of partners to help them scale quickly in today’s market.
"Lenders that take advantage of this window of opportunity, when they have both the time to choose and implement new technologies and the cash to do so, will lead through this downturn and emerge as stronger competitors when the next upturn arrives," according to Stratmor Group. "Making good choices will require them to fully understand the needs of their borrowers and invest in technologies that will deliver high levels of borrower satisfaction."
Is it time to evaluate your tech stack? Check out the things to look for in a true LOS Partner here.