Homebuyers remain a huge opportunity for credit unions

Home buying is painful. Aside from the financial considerations and worries, the process of home shopping and home financing is a real challenge filled with anxious moments and uncertainty. In 2016 U.S. homeownership rate fell to the lowest point in over 50 years as rising prices put a home purchase out of reach of many Americans. The Census Bureau reported that the percentage of Americans who own their homes was 62.9 percent in July, 2016, the lowest since 1965. Last year, the homeownership rate for Americans ages 18-34 fell to 34.1 percent. This drop in homeownership is due to a delay in homebuying by millennials, who have the lowest ownership rate of their age group in history. However, regardless of age group, the decision to purchase a home will likely have lasting impacts on the household’s finances.

Of course a home purchase is the biggest purchase the majority of Americans make, but it is also typically the most impacting. Buying a home should never be simply viewed just as a single financial milestone, but rather one that can set the stage for financial gain (or demise) for decades to come. In other words, home buying is a very big deal for consumers and credit unions.

Be it a first time purchase or a vacation home, credit unions have to understand the emotional side of homebuying; regardless of demographic, it’s a stressful time. Certainly your members have more questions than answers when it comes to buying, financing and closing on a home and this is opportunity for credit unions to demonstrate their commitment to advocacy. Offering mortgages and competitive rates is just not enough, and it just feeds commoditization of financial services. Credit union marketers should consider content, search engine optimization, reputation management and member education, if they want to remain competitive and relevant in the mortgage business.

While connecting emotionally with home buyers is vital, the overall home buying and mortgage experience needs improvement. Clearly, digitization and modernization of the mortgage process offers many advantages, namely:

• Enhanced experience through design and automation
• A focus on convenience
• Recognition that efficiency leads to lower costs, and savings can be passed on to buyers
• Improved compliance and quality control
• Omni-channel capability

The last point is very important to credit unions. Digitalization of the mortgage process can be leveraged to improve not only the online experience, but also the in-person experience. Buying a home is a very personal endeavor, and this is something that the real estate and credit union industries must realize.

Becoming overly reliant on technology can alienate some homebuyers who prefer a one-on-one relationship with one of your lending professionals. Consumers today like to have options. The key in today’s home buying and mortgage environment will be a combination of approaches that balance technology and personal connections or relationships. With competition ever-evolving, credit unions need to view the mortgage business in a different light; one that is much more in line with the ever changing needs of the American consumer.