Matt Woodhouse is managing director of valuations at ServiceLink, a provider of digital mortgage services to the mortgage and finance industries. In this capacity, Woodhouse works alongside fellow leaders within the valuations organization to develop and implement new processes and technology solutions for lender clients to digitize and streamline key milestones in the originations process. This work includes support of ServiceLink’s EXOS Valuations and EXOS Inspect products, leveraging the power of AI and machine learning to bring greater transparency and ease into the real estate appraisal and inspection processes.
Speaking with MReport, Woodhouse discusses top takeaways from ServiceLink’s State of Homebuying Report, featuring results and analysis from a recent survey of 1,000 homeowners nationwide, and what it means for lenders who wish to remain competitive in this rapidly evolving, tech-driven landscape.
What were some of the most surprising takeaways from the survey?
Woodhouse: While there were quite a few data points that stood out from both a homebuying and refinancing standpoint, one of the most surprising takeaways for me was that, in spite of all that is stacked against them in the current market—low inventory driving up home prices, intense bidding wars, sky-high lumber costs, etc.—32% of all survey respondents still expressed a likelihood to buy a home at some point in 2021. Tangential to this from a refi standpoint, I was also surprised to see that a portion of respondents who did not refinance in the last 12 months (51%) were waiting for the rates to go down further (27%), even as they continued to hover around the 3% mark. To me, these findings illustrate the opportunity that exists for lenders and Realtors alike to serve as sources of education to borrowers as they navigate this tumultuous market and prepare to buy or refinance in the near future.
For those who did buy a home in the last 12 months (11%), their motivations for doing so included upsizing from their current home (36%), buying as an investment property (32%), and needing more space to work remotely (23%); all in-line with trends we’ve been tracking over the past year, spurred by the pandemic. Another notable finding: recent homebuyers were also more likely to tap into their 401(k)s to fund their purchase—27% versus 9% for respondents who purchased a home before 2020.
Lastly, it was also interesting to see how respondents’ perceptions of the homebuying process were improved by technology (68%) as well as their willingness to take a self-serve approach to certain aspects.
Speaking of technology, what did the survey findings reveal about tech’s continued importance in the homebuying and refi journey?
Woodhouse: This survey solidified that technology is now industry table stakes, and borrowers have a growing expectation for digital experiences. As millennials continue to be the fastest growing segment of homebuyers in the United States—with digital natives Gen Z hot on their heels—the importance of technology will only continue to grow in the housing market. To expand further: our survey found that most Gen Z/millennials (89%) used technology during the homebuying process. They leveraged it to research property listings online (62%), take virtual tours (42%), and solicit advice/recommendations for mortgage services and realtors online (27%).
When asked about completing key milestones of the homebuying process online, or taking a self-serve approach, millennials/Gen Z were also most willing to do so. For example: 33% of this demographic stated they would be “very willing” to submit videos or photos of their home to facilitate a refinance or home equity loan, while 32% expressed a willingness to conduct their closing via video conferencing if the option was available.
However, all three demographic groups—Gen Z/millennials, Gen X, and baby boomers—saw the benefits of mortgage technology, with 68% of all respondents citing convenience and ease of use as the top benefits of leveraging tech.
Based on this data, how should lenders pivot to better meet borrower needs in the future?
Woodhouse: Providing borrowers with education and support, while also providing a digital-first experience, can help lenders keep borrowers happy and improve the likelihood of earning their repeat and referral business. This advice is backed by our survey findings, which show there is still room for improvement to deliver a more streamlined and transparent mortgage process to borrowers today: less paperwork (35%), more transparency around fees (33%), having to provide the same documentation multiple times (33%), and more transparency into the steps and timeline (30%) all topped the list as pain points that could use improvement, according to respondents. Keeping these key points in mind, while actively working to eliminate any areas of friction for borrowers as they near the closing table, can help lenders deliver a stronger consumer experience that aligns more closely with homebuyers’ growing expectations.
To view the full ServiceLink State of Homebuying Report, visit: go.svclnk.com/state-of-homebuying-report.html.