THE ADVANTAGE
Your monthly recap of the most important
mortgage-related news, perspective, and advice
July 2024
Increasing Home Sales:
3 Ways to Understand Motivated Buyers
3 minute read
In our last newsletter, we shared our Housing Market Update and talked about how most of the numbers weren’t exactly favorable.
Except for one – steadily increasing home sales.
This month, I wanted to share some insights into what’s motivating home sales and how you can translate that to more mortgages on the books as we transition to the latter half of 2024.
Headline we're reading behind:
If you’re not seeing even a marginal increase in mortgage inquiries or would like to, MAM can help you focus on your specific market, membership and more to help you tap into this with speed and efficiency.
Right now, there are some trends that we’re seeing with our CU partners and their members. There are three factors driving buyers right now, and they’re largely emotional and reactions to the current state of the market. Using these factors to our advantage as lenders we can provide innovative products, educate motivated buyers, and capture those sales.
Rental Fatigue
One big factor driving homeownership growth is rental fatigue. Rent prices have risen steadily since 2020 and inflation has made renting more expensive than ever before. Plus, many landlords are making up for pandemic-related rent-hike freezes with steeper prices and less rental concessions, making things even tighter for renters. Lenders with incentives like zero closing costs could succeed in markets where landlords are tightening up.
Despite the barriers to homeownership (low inventory, high demand, rising rates and prices), the slow but steady increase in home sales – especially among first-time homebuyers – indicates that buyers feel the benefits of owning far outweigh renting as time goes on.
Less Fear of Adversity
Another factor that’s driving home sales is a kind of fearlessness among certain buyers. While some buyers in some markets have been effectively priced out, others with marginally deeper pockets are willing to invest in what they want with less fear about where the market is going.
First-time homebuyers, both Gen Zers and Millennials, have weathered economic crises and difficult job markets their entire careers. Many are tired of putting off their homeownership goals and are willing to find creative solutions to achieve them. Whether that’s a low or zero-down option or getting parents to co-sign, these young buyers are highly motivated. They just need the right solution.
Similarly, families who’ve outgrown homes, whether too big or too small also do not want to wait for their next chapter to begin, so they have less fear of any economic downsides to buying and selling now.
Both of these kinds of fearless buyers just need a lender who understands this motivation to get in front of them. They also want a streamlined process, because this indicates to them that they have indeed found a solution that “works.”
Perspectives on Change
Similar to the fearlessness in regards to adversity, many motivated buyers have a positive attitude toward change. While certain aspects of the market and economy would make it seem like putting off buying is a smart choice, others see investing in a home as a financial hedge against uncertainty.
The slow but steady growth in sales lately indicates that these buyers are optimists. They feel that positive changes are coming. Why they are optimistic is a bit harder to pin down, but it’s sufficient to assume they are optimistic about their personal finances and the larger economy at the same time. These buyers may find ARMs more attractive and respond well to marketing that matches their optimism.
Don't wait on the sidelines.
Considering these factors, it’s time to get in the game now. Housing prices most likely will continue to increase. Inventory will remain a problem. But rates move up and down over time and savvy Americans have benefitted through countless refi-booms in the past two decades. Credit unions are uniquely positioned to capture these smart consumers by talking to them in the right way first, then giving them the best membership and homeownership experience.
Let Us Help You Tap In to These Trends
We know that offering mortgages to your members is a significant expense, but with the right approach and partner, even a small bump in volume can be worthwhile. We offer turnkey resources, personalized support, and the ability to scale to your needs.
Member Advantage Mortgage helps make credit unions the hero of their members’ homeownership journey, regardless of their size. We think the best place to start is by listening.
If you’d like to hear more about how MAM is helping credit unions meet their members’ mortgage needs, contact Jim Mitchell at (616) 466-7793 or [email protected].
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Who Is MAM?
Member Advantage Mortgage (MAM) is a Credit Union Service Organization (CUSO) that helps credit unions increase revenue by offering mortgage solutions to their members.
We achieve this by finding the mortgage solution that is in each individual member’s best financial interest.
What We Do
Since 2006, MAM has offered first and second mortgage origination and fulfillment services to credit unions. We also provide marketing tools (like our Mortgage Payment Calculator) to increase lead generation.
How We Can Help You
We’ll help you improve member satisfaction and deepen member relationships by offering or streamlining your mortgage delivery process. You’ll be able to serve current members so they don’t need to turn to the competition, all while increasing your mortgage revenue and generating non-interest income.
How You Can Learn More
This page goes into greater detail on exactly how we provide support and partner with credit unions.
You can also call Jim Mitchell, our Senior Vice President of Strategic Partnerships, to get answers to any questions about partnering with MAM.
Disclaimer:
This information is solely for credit union and mortgage professionals and should not be distributed or provided to consumers or the general public.
This is not an offer for extension of credit nor a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. Certain restrictions may apply. All approvals subject to underwriting guidelines. Not all applicants will qualify. Member Advantage Mortgage, LLC is an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.
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