How Consumer Attitudes are Transforming Home Buying Experience

PwC, New York, said consumer attitudes are transforming the home buying experience, providing lenders with an “invaluable opportunity” to build long-term relationships.

The company’s annual Home Lending Experience Radar (https://www.pwc.com/us/en/industries/financial-services/library/pdf/pwc-fsi-whitepaper-2019-home-lending-experience-radar.pdf) said in an increasingly digital landscape, consumers are seeking one solution that integrates all components of purchasing and financing a home, leaving a wealth of opportunities for the mortgage lender through numerous touchpoints along the home-buying journey.

The survey said nearly three-fifths (58%) of homebuyers seek advice from lenders as their first step as they begin to plan and budget.

Key report findings:

–Lenders should be a partner for life, not just a loan provider. “Lenders have an invaluable opportunity to build rapport with home buyers early,” the report said. “The lenders that prepares for and welcomes this early conversation is the lender that is most likely to position itself as the trusted advisor for the end-to-end home buying process.”

–Consider tech companies as potential competitors. “While the idea of technology companies as new market entrants threatens to disrupt traditional lending, traditional lenders still have a number of built-in advantages stemming from truly understanding the customer base,” the report said.

–Don’t forget the personal touch. “For the lender, issuing a mortgage is an everyday transaction, but it’s a personal and highly important decision for the buyer,” the report said. “Lenders that can tap into the personal aspect of the transaction and build a relationship of care could be more likely to see an uptick in repeat business.”

–Offer an integrated experience. “Lenders that can offer guidance from home search through home purchase may differentiate themselves from their competition,” the report said. 

–Use digital tools where they’ll be most valuable. “There are a variety of effective tools, from intelligent automation to business-led design, that lenders can use to give borrowers the streamlined, easy mortgage process they want–but the customer experience has to stay front and center,” the report said.

The report said lenders must treat data as their greatest assets. “Many lenders have an astonishing amount of data about what their customers and prospects want,” it said. “But because they don’t analyze this information effectively–or analyze it only while considering a loan–they resort to one-size-fits-all offerings. This gives the customer an experience that feels disconnected from the rest of the process.”

The report said data analytics can help firms make evidence-based decisions, instead of intuition-based, allowing them to determine what each customer values most. “Leveraging data in this way can also arm their consumer-facing employees with the information they need to offer personalized products and advice, creating a truly one-of-a-kind experience,” itsaid.

The report noted while technology has transformed a number of industries, the home-buying experience “really hasn’t changed all that much.” While buyers frequently search for homes online rather than asking a real estate agent for brochures, “we really haven’t seen the level of transformation that has been driven out of Silicon Valley, Seattle and elsewhere. Yet.”

PwC said one thing that is transforming is consumer attitudes. “Consumers see the innovation that has occurred elsewhere and they say, ‘I want that,'” the report said. “As a result, they’re not just looking for a best-in-class home searching experience or an amazing digital mortgage experience, they’re demanding an integrated homeownership experience. Instead of eight different specialists, they’d prefer one–a solution that integrates all the components from searching and financing through living and upgrading.”

PwC said the industry is already seeing traditional boundaries disappearing among banks, brokers, alternative lenders and others-the same shifts that have been happening in the underlying real estate market.

“As the housing and financed pieces morph, they are beginning to approach the same place,” the report said. “There’s some good news for mortgage lenders: there are actually more growth opportunities now than we’ve seen in a long time.”

To take advantage of these opportunities, Pwc said lenders need to develop strategies and be prepared to act. “They’ll want to consider how to make the mortgage more efficient and customer-friendl, and how they can be more closely connected to the rest of their customers’ home buying journey,” the report said. “To succeed, lenders will likely need to know much more about who their customers are and what they’re comfortable with, both today and in the future.”