Potential homebuyers will continue to need guidance about the best strategies for a rapidly changing housing market if mortgage rates continue to fluctuate as they have — from a high of 7.79% in October 2023 to 6.08% in late September.
J.D. Power’s 2004 Mortgage Origination Satisfaction StudySM, released in November, saw lenders’ overall scores drop by three points from 2023. However, according to Bruce Gehrke, J.D. Power’s senior director of lending intelligence, several lenders achieved higher marks by adopting a more consultative role. “Consistently, we’re seeing that lenders who play an active advisory role in helping their clients navigate the current market are earning significantly higher customer satisfaction, loyalty and advocacy scores than those treating mortgage lending as a transactional process,” he says.
Additionally, Bank of America’s 2024 Homebuyer Insights Report determined that higher interest rates and home prices have many prospective buyers concerned about making costly mistakes. Based on surveys conducted in March with more than 2,000 renters and homeowners, the report’s authors determined that potential homebuyers have lost confidence due to a lack of understanding in four areas:
- How to finance and secure a mortgage — 42%.
- Homebuyer grant programs — 53%.
- Interest rates — 41%.
- Homebuying terminology — 39%.
As borrowers face a housing market that’s still processing changes like new leadership in Washington, D.C., and possible future rate cuts, here are three ways to connect with borrowers — in person and using social media — to help guide them through the mortgage process with greater confidence:
Study the Latest Housing Data
Keep up with local and national trends, including housing inventory levels, median home prices and affordability, so the information you provide to potential clients is accurate.
Stay current on “the big picture” with Arch MI’s HaMMRSM Digest. Published weekly, it provides an “at-a-glance” overview of key trends, clear bullet points on key business indicators and more than a dozen charts highlighting key measures such as inflation, employment and home sales in the nation’s top metros. HaMMR Digest is written by Arch Chief Economist Parker Ross and Director of Real Estate Economics Leonidas Mourelatos — who also team up on quarterly Housing Update Webinars, one of our most popular live events.
Ross and Mourelotas will next share their thoughts on current factors affecting housing and where the industry will likely be in 2025 during a live, hour-long Housing Update Webinar on Thursday, Dec. 12., at 1 p.m. ET.
Use Data and Visuals
Words alone often fail to convey complex or abstract information. In a recent article titled “How Do You Make Your Mortgage Explanations Memorable?” a team of mortgage experts and a Realtor® explain how charts and other graphic tools help communicate how factors like interest rates, loan terms, down payments or prepayments can change monthly payments or total costs.
Another good starting point is Arch MI’s Roadmap to Homeownership. It includes a comprehensive presentation — which you can co-brand with your own logo — to lead individuals or a group through topics like “The Benefits of Owning a Home,” “Calculating a Monthly Payment” and “Loan Approval.” Our two-minute “What Is Mortgage Insurance?” video offers borrowers an even quicker overview in English and Spanish. Other videos include “About Arch MI,” a borrower-focused “Guide to MI Cancellation” and “How Arch MI Insures (Fannie Mae) HomeReady® Loans.”
Focus on Local Conditions
Facing a limited housing inventory, many homebuyers are seeking insights into the specific neighborhoods, schools and parks that can have an outsized impact on home values. Recently, the LenderHomePage blog discussed the importance of emphasizing local community knowledge in “How to Be a Successful Loan Officer in a Challenging Market.” For many aspiring homeowners, data on measurements like pricing trends and days on the market for specific areas is relevant and actionable, so make sure you can provide it.
Educating your clients about market conditions empowers them to make informed decisions and positions you as a knowledgeable and trusted advisor. In the competitive world of mortgage lending, winning a reputation as a reliable information resource for housing can set you apart, build loyalty and foster long-term relationships with your clients, Realtors and other referral partners. If you’ve developed a strategy for helping clients stay aware of the most meaningful factors affecting housing, please share it with the authors of the Insights blog. We may use your input to revisit this topic in a future post, riters, and we may use your input in a future Insights post on this topic. We look forward to hearing from you.