More than three-quarters of mortgage executives (78%) who took a survey in May believe first-time home buyers will either retain or grow their market share in existing-home sales over the next year; however, 64% say down payments are still a major obstacle.
Of the 120 executives who took the survey conducted by Genworth Mortgage Insurance on-site at this year’s Mortgage Bankers Association’s (MBA) Secondary Conference, 47% expect first-time home buyer market share to continue at current levels, while 31% says they expect share to increase by at least three percentage points.
About 22% say they expect to see first-time home buyer market share decrease by at least two percentage points.
Although 64% of respondents cite the lack of a sufficient down payment as being the biggest obstacle holding back first time home buyers, about 16% believe a lack of adequate income when applying for a loan is the greatest obstacle.
Nine percent indicated home price affordability was the biggest hurdle, and an additional 8% cited poor borrower credit scores. Only 3% of respondents believe there are no major hurdles with borrowers’ access to mortgage credit in today’s environment.
“Our industry, via this year’s survey data, acknowledges the first-time home buyer’s rise as a key component of the homeownership mix,” says Rohit Gupta, president and CEO of Genworth Mortgage Insurance, in a release. “To support this demand, we must stay true to the great strides we have made in improving underwriting quality, making private capital available, and expanding the availability of prudent and affordable low down payment mortgages. Under these circumstances, it is important that all industry participants continue work to ensure we have an accessible, efficient and innovative environment for new mortgage originations.”
Interestingly, almost half of respondents (49%) believe that technological integration into the home lending process is subpar. This represents only a 3% improvement from when Genworth asked the same question to industry executives at the 2014 MBA Annual Conference.
About 38% of respondents believe that technology integration today is average – and only 13% believe technology integration is strong.
Genworth points out that although many firms in the industry have begun improving their technological infrastructure, “these investments can carry long lead times before showing a true impact.”
“This seems to be influencing the industry’s perception of where it ranks in terms of technological integration,” the firm notes.
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