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20 | M R EP O RT FEATURE FEATURE family rentals holds great promise for improving the living condition of renters. With more landlords being mom-and-pop inves- tors, everyone's experience with rental houses depended on their landlord. If your landlord was communicative and handy, you probably loved renting a home. However, if your landlord was unresponsive and unsympathetic, rentals probably came across as a bad option. Starting with the 2008 finan - cial crisis, institutional investors entered this sector with the ability to provide more choices and services to renters, as well as the option to rent-to-own. Because of their scale, when it comes time to relocate, the same landlord may be able to identify the next property and let the renter decide the move date without paying rent or mortgage twice. According to John Burns Real Estate Consulting, 10 companies have accumulated just under 300,000 housing units and are still growing. While still small in the overall rental market, these companies are massive compared to the traditional mom-and-pop investors and have the resources to be able to provide a superior experience to renters. Bridging the Digital Divide T he way people buy and sell homes has been revolution- ized by technology firms that specialize in providing financial services directly to consumers or providing tools, services, or infra- structure to existing financial ser- vices companies. These firms are collectively called fintechs. While these companies existed prior to 2020, the COVID-19 pandemic and resulting stay-at-home orders have created a unique environment that has accelerated the growth and adoption of tools like Zillow, Redfin, OpenDoor, and Realtor. com. For example, the traffic to Zillow's mobile apps and websites increased by 12% in Q2 to a record 218 million average monthly unique users. The move is not limited to the housing sector but applies to the entire fintech sector. According to The Economist, mobile-banking traffic was up by 85% and online-banking registra - tion by 200% in April. The COVID-19 pandemic has created a necessity to adopt digital banking, and that trend also included the housing sector. In the mortgage sector, sharply lower interest rates since late-February have generated a historical surge in refinance volume that stretched the capacity of the entire indus - try and created opportunities for technologies that offer elastic capacity to lenders. These services were instrumental in keeping the market moving during the pandemic. There is no need to meet face- to-face with a person or conduct any business outside the home. Users can view homes online, ask any questions, and view all the home data without going anywhere. These tools make transactions easier because of the availability of online home data. Being able to buy and sell online was critical for keeping the housing market moving during an event that had the potential to bring the market to a devastating halt. Homebuying and selling, like other commercial activities such as grocery shopping and equity investing, will become digital, bringing lower costs and greater convenience to consumers and more business opportunities to the housing industry. A New Approach T he period between 2009-2020 has been the slowest housing recovery on record for homebuild- ers. Historically, the industry has delivered around 1.5 million new homes a year on average to home- buyers. However, 11 years after the trough, the market remains below that important milestone. Builders have learned to be profit- able with low volumes, but can they build more? Rising demand and home prices give us reason to be optimistic. Higher home prices give builders the incentive to un- dertake large capital investments to scale up, hire workers from competing industries, and pay top price for materials such as lumber and to buy land. Two other revolutions will also prove important. As working from home increasingly became the norm, commuting became less of a constraint. More people moved to the suburbs, where it was cheaper to build new homes and where land is more plenti - ful. We will also likely see an increased use of modular building techniques, which will allow builders to standardize much of the construction process. This not only cuts down on costs but also helps ramp up productivity and improve quality. Just as builders learned to be profitable in a de - pressed market, they will learn to be profitable in a bigger market. Whether you're buying a first home, looking online for an upgrade, waiting for a new home, remodeling what you have, or simply looking for a rental, the way people find and afford homes is changing. No matter the indi - vidual need, the priority is getting into homes. Though the 2020 pandemic posed a threat to housing, it has sparked some important change in the industry and this change will bring a new approach to housing in 2021. . TIAN LIU has served as Chief Economist for Genworth Mortgage Insurance Corporation since 2014. He is responsible for tracking and analysis of U.S. and regional economic conditions. He authors the company's Weekly Economic Report and provides regular updates on housing and mortgage markets. Mr. Liu began covering the U.S. housing market in 2007. His commentary on the housing market has appeared in the Wall Street Journal, New York Times, CNBC, the Washington Post, and other notable publications. Liu has a master's in economics from the University of Chicago and an undergraduate degree in economics from the Australian National University. The statements provided are the opinions of Tian Liu and do not reflect the views of Genworth or its management. Homebuying and selling, like other commercial activities such as grocery shopping and equity investing, will become digital, bringing lower costs and greater convenience to consumers and more business opportunities to the housing industry.