More than half of mortgage professionals say rising interest rates are the biggest obstacle facing the housing market in the year ahead.
And the industry needs to push forward with the digitization of the mortgage application process.
The findings are from a new Genworth Mortgage Insurance survey which found that mortgage professionals believe the biggest concerns for consumers apart from interest rates (54%) are housing affordability (37%), GSE reform (7%), and the pending expiration of the Qualified Mortgage patch (two percent).
However, when considering just first-time buyers, 58% of mortgage professionals said the sparse availability of affordable homes was the biggest barrier to entering the housing market.
Lack of knowledge of the homebuying process (20%), interest rates (13%), and lack of appropriate credit history (9%) were also considerable challenges for first-time buyers.
"While rising interest rates and a lack of affordable housing supply continue to drive increase in home prices, first-time homebuyers have not wavered in their efforts to buy homes," said Rohit Gupta, President and CEO, Genworth Mortgage Insurance. "We continue to stress the importance of education and optionality for this demographic to set them up for success. Their growing presence in the purchase market will require continued support and customization as they continue to play a meaningful role and drive demand in the housing market."
Where mortgage professionals can improve
When asked about the mortgage industry, 85% of executives said that integrating technology into the loan application submission process (41%) and/or the closing process (44%) will provide the strongest improvements to the customer experience.
Just 15% felt that the loan inquiry process or private mortgage insurance could improve significantly with technology.
Asked about borrowers’ risk profiles, 41% noted a small improvement in the quality of borrower they were seeing, while 53% saw no change or a small decline in these profiles. 5% identified a significant increase in the risk profiles they were viewing while only 1% saw a significant decline.
Supply issues not helped by policy
Policy changes introduced over the past 12-24 months have done little to support construction of homes in the $300K and below price point according to 62% of the mortgage professionals.
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