Many would-be homeowners have been sidelined for the past three years, creating pent-up demand for homes, especially among first-time homebuyers.
Part of this demand is due to sheer demographics. Millennials hit peak home-buying age starting in 2017 and made up the largest share of mortgage applications from 2017 to 2022. But many Millennials have been priced out of the very competitive housing market since the COVID-19 pandemic and are still waiting for their first chance to buy. Meanwhile, they are forming households and having kids – two triggers for home-buying no matter where interest rates are.
The lack of housing inventory has also fueled demand. Lawrence Yun, chief economist for the National Association of Realtors (NAR), noted in January that once mortgage rates drop even a little bit, homebuyers will be ready to jump back into the fray. And NAR, along with the Mortgage Bankers Association, is forecasting mortgage rates in the 5s by the end of the year.
In addition, although mortgage volume is down, there are less mortgage lenders to handle that volume. After a very difficult year, the lenders still standing have a good opportunity to grow their market share – but only if they are ready. This white paper outlines three key strategies lenders can use to take advantage of pent-up demand, compete more effectively, and drive scalable growth.
- Publisher: Polly
- Date: June 2023