MReport May 2020

TheMReport — News and strategies for the evolving mortgage marketplace.

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34 | M R EP O RT FEATURE of materials has increased, job growth has been up along with home prices, and housing supply has only recently begun to expand. For builders, a focus on building affordable homes must remain at the forefront of every affordability discussion. Adding to the inven- tory of homes in the $200,000– $300,000 price range provides more opportunities for first-time homebuyers to enter the housing market without waiting for exist- ing homebuyers to move to their next home. At the end of 2019, lower interest rates and slower growth in home prices helped improve housing affordability more than any other factor, but affordability chal- lenges still exist. Lower rates mean significant savings for first-time homebuyers, but the number of homes in that magical $200,000– $300,000 range still lag the demand. Coupling this reduced supply with the Pinterest-influenced expectations that many first-time homebuyers have for their first home—yard size, design features, neighborhood amenities—can make a loan originator's role challenging to help these buyers have realistic expectations and avoid making a poor financial decision. Streamlining With Millennial Expectations I t also is important that industry professionals understand what first-time homebuyers are expect- ing of them. Since millennials are the primary generation in the first- time homebuyer category, it is key to understand what they value and what they expect in dealing with real estate agents, mortgage lenders, homebuilders, and other process participants. User experience is paramount among these expectations. Millennials have grown up with more access to technology than former generations and expect it to be involved in virtually every aspect of everyday life. Take a moment and think about how many tasks you accomplish simply through the use of technology: ordering grocery delivery and pick- up services, hailing a ride, updat- ing vehicle registrations, partici- pating in group exercise—the list goes on and on. Having grown up with this type of technology and ease of access, entering a process that predominantly depends on in-person interactions and highly regulated processes can be jarring and undesirable for millennials. So many brands millennials interact with have conditioned them to expect a seamless experience out of everything they do. This means a few things for the housing in- dustry when it comes to creating a positive homebuying experience: Each interaction must be fast and simple. With millennials feeling busy and starved for time, they do not want to spend hours of their day on tasks that they feel could be expedited through the use of technology. Efficiency is the target here. Examine your current processes and procedures and see how you can enhance the efficiency of those processes as a whole or in segments to create a more streamlined and painless process. Communication must be fre- quent and transparent. Millennials have grown up in a highly con- nected world, and they want to know what's happening as soon as it happens. They do not want to feel like they are being misled or that information is being with- held. It is important to make sure first-time homebuyers are informed every step of the way through regular check-ins or, more ideally, the use of technology platforms that enable text and email alerts. Knowledge-sharing is key. With this being their first journey into homebuying, they also will highly value professional expertise, so be sure to share your knowledge every step of the way. Many are looking for professional guidance as they make their first homebuy- ing decisions. Let's not forget that many first-time homebuyers are not as informed as they'd like to be, so leaning on your expertise will not only ease their anxiety, but also will create a smooth path from start to close. Make sure they are able to self- serve as much as possible. Having technology options available helps millennial borrowers do things on their own terms and timetable and feel more directly involved in the process. Many loan origina- tion systems are heavily focused on their self-serve capabilities, so now is a good time to see where your system stacks up against the competition. Be flexible. While the influence of the millennial generation on our daily lives is unmistakable, your presence and processes need to be flexible enough to support a range of expectations when it comes to helping someone buy their first home. Maybe they want their hands held through every step of the process. Maybe their parents will be heavily involved in the purchase process. Maybe they want to conduct all interactions via video calls without leaving their couch. Lenders need to be ready for all of it. The saying "dif- ferent strokes for different folks" has never been more applicable. Continuing to reach, inform, and interact with first-time homebuyers requires new ways of thinking and working, along with accommodating the genera- tional shifts in expectations. If the industry is up for the challenge, though, we could bring the dream of homeownership to many, many more people. . KEVIN MCMAHON is SVP of Customer Solutions at Genworth U.S. Mortgage Insurance. Utilizing his consulting, marketing, and operations experience, McMahon develops and evolves strategic direction for Genworth as part of the senior leadership team. His leadership has been instrumental in Genworth's market positioning, customer experience, and operational efficiency. The statements provided are the opinions of Kevin McMahon and do not reflect the views of Genworth or its management. So many brands millennials interact with have conditioned them to expect a seamless experience out of everything they do. This means a few things for the housing industry when it comes to creating a positive homebuying experience.

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