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Opinion, commentary, and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Lending

Want to disrupt the mortgage industry? Ask the decision makers

Here's who will drive this disruption

November 7, 2016

Throughout Digital Risk’s “Break the Glass” Executive Women’s Sonoma Summit, we brainstormed how and why disruption in the mortgage industry should be spearheaded by one of the most influential, highly educated, and fiscally responsible consumer groups – women.

In a presentation from event speaker Marcia Davies, chief operating officer of the Mortgage Bankers Association, she shared a statistic that in 47 of the 50 largest metropolitan areas single, childless women in their 20s are making more money than their male peers.  And, single women outpace single men as first-time and repeat homebuyers according to the National Association of Realtors’ 2016 study.

Davies reflected upon data that indicated a direct correlation between education and buying power where the numbers were more striking for women. Women exceeded men by 4% in terms of securing higher education between the ages of 25 to 32 (27% of women and 23% of men in this age group earned a Bachelor’s degree in 2014). The data reflected that single women with higher education levels are more likely to purchase homes before their male counterparts. 

The Urban Institute’s study shows that while single women often carry more debt and have lower credit scores, they are better at paying their mortgage than their single male counterparts. Women choose to put down much higher down payments despite having lower incomes, reflecting that single women are more risk-adverse than single men. One can conclude single women have proven themselves to be better loan performers.

Davies also shared several powerful findings from The Harvard Business Review’s study called “The Female Economy,” which found that women drive the economy.  Unfortunately, this study also found that women were most critical in their comments about financial institutions. They cited a lack of respect, poor advice, contradictory policies, one-size-fits-all forms and a seemingly endless tangle of red tape.

Davies concluded with the need for our industry to not only support women but also recognize them as a target market segment for lenders to grow their business.  I suppose that’s where the opportunity lies. If these market drivers can advise their companies on how to offer their female counterparts better advice, trust, service and a great deal, a disruption can definitely take off in mortgage industry.

We heard over and over again during this Summit that the platform for disruption in the industry is here and now. As long as companies engender more diversity in their workforce, they will not only benefit from more innovative thinking, strategies and products, but also a better understanding of their target audience.

Who would better understand the differences, needs and wants of the major purchase decision makers than women? It is women who will drive this disruption and the corresponding revenues resulting from the attraction of more consumers.

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