Southern Bancorp’s Jeremy Davis: First-Time Homebuyers Are Not a Niche

Jeremy Davis is president of mortgage at Southern Bancorp, Little Rock, Ark.

First-time homebuyers are still too often discussed as a segment, a pilot or a program inside a broader mortgage strategy. That framing no longer matches reality. In 2026, lenders who continue to treat first-time buyers as a secondary focus may post strong results in short cycles, but they will struggle to build institutions that endure.

First-time homebuyers are not a niche. They are the market. They are the future. More importantly, they are the borrowers whose earliest experiences shape long-term perceptions of trust, credibility and value. The institutions that earn trust early are not just closing loans–they are building reputations that last for decades.

Why the “Niche” Mindset Falls Short

Many lenders still view first-time buyers through a narrow operational lens. These borrowers often need more education, more guidance and more time. On a spreadsheet, that can look inefficient when measured purely by volume or per-loan margin. As a result, first-time buyers get siloed into special programs instead of being treated as a core growth strategy.

That thinking misses the bigger picture.

For many borrowers, this is their first meaningful relationship with a mortgage lender. How that experience feels determines whether they see the institution as a trusted financial partner or just a one-time transaction. That perception influences everything that follows, including referrals, repeat business, and whether a mortgage customer ever becomes a long-term banking customer.

They will remember how you treated them long after the rate environment changes again. In a competitive market, that memory is either an asset or a liability.

Future Demand Is Already Taking Shape

The makeup of future homeownership demand is becoming clearer, even as the market remains volatile. First-time buyers from historically underserved and emerging communities represent a growing share of the next generation of homeowners.

Black, Hispanic, new Americans, rural households, low-wealth borrowers and first-time buyers are not edge cases. They are the largest pool of future homeowners. This is not just a conversation about values or inclusion. It is a clear signal about where sustainable demand will come from.

Lenders who fail to build relevance, cultural fluency and trust with these buyers are not avoiding risk. They are creating it.

This is where community banks and mission-driven institutions have a structural advantage, if they choose to use it. Proximity, local credibility and long-standing community relationships are not soft benefits. They are competitive assets in a market where trust matters more than speed.

Trust Begins Before the Application

For first-time buyers, trust is rarely built at the point of application. It starts earlier, often well before a borrower ever fills out a form or checks a rate.

The lenders who win in 2026 will be the ones who know how to show up in the right places, speak human and build trust before the transaction begins. That means meeting buyers where they already gather, both geographically and emotionally. It means prioritizing education over promotion and clarity over complexity.

First-time buyers are not looking to be sold. They are looking to understand.

We have seen firsthand that when institutions invest in genuine community relationships, buyers respond. When education leads and marketing follows, engagement increases. And when internal culture is rooted in mission, borrowers can feel it, even through a phone screen.

Stability Through Relationships, Not Cycles

Refinance activity will always play a role in mortgage performance, but it is not a business model by itself. First-time buyers offer a different kind of value. Their decisions are driven more by life stage than rate sensitivity, and their relationships with lenders often extend well beyond a single closing.

As we move further into 2026, the link between mortgage lending and long-term financial relationships will only grow stronger. Institutions that connect homeownership to broader financial engagement will be better positioned to manage liquidity, grow deposits and retain customers through market swings.

This outcome is not driven by clever campaigns or new tech alone. It is driven by trust, consistency and follow-through. Community banks that align mortgage strategy with long-term relationship banking are already playing the long game, whether they call it that or not.

Culture Is Felt, Not Advertised

First-time buyers experience a lender’s culture in every interaction. They hear it in how questions are answered, see it in how challenges are handled, and remember it when something goes wrong. Trust is a system, not a slogan.

Culture is not built through a single initiative or campaign. It is reinforced through daily behavior and leadership consistency. For first-time buyers, that consistency matters most in moments of uncertainty.

These borrowers often arrive with more questions, less confidence and a higher emotional stake in getting it right. In those moments, culture becomes tangible. It shows up in how clearly the process is explained, how patiently concerns are addressed, and how transparently expectations are reset when timelines shift.

A strong internal culture gives teams the confidence to guide first-time buyers calmly through complexity. That confidence builds a kind of trust that no script or tagline can replicate.

The Opportunity Ahead

First-time homebuyers are not a niche because they define future demand, shape institutional reputation, and determine long-term relevance during periods of volatility.

They are the borrowers who will recommend or caution against lenders in their communities. They are the foundation of future portfolios and multi-product relationships. And they sit at the center of a strategy where mission and margin reinforce one another rather than compete.

As 2026 unfolds, the lenders who succeed will be the ones who stop treating first-time buyers as a specialized segment and start serving them as the core of a sustainable growth strategy.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)