The Scrappy Home Buyer Segments Still Active in Today’s Tough Housing Market

Just as the interest rate landscape is evolving, so is the profile of American home buyers. From single women and Spanish-speaking demographics to young and first-time buyers, historically underserved segments are finding ways to get on the property ladder. As a lender, now is your opportunity to connect with these audiences to create new funnels of borrower business and position yourself as a go-to resource for years to come.

Overwhelmingly, these borrower groups report wanting personalized service, proactive communication, and better support during the lending process. It’s up to loan officers and other borrower-facing team members to improve the mortgage experience and make it more inclusive for America’s rising home buyers.

Women home buyers 

As a share of borrowers, female home buyers have increased by almost 10% over the past two years. Across the country, women represent an increasingly young, independent force vying for homeownership. In Q2, Maxwell data found that over half of women borrowers were unmarried, an increase of 2% QoQ. Male borrowers, meanwhile, were significantly more likely to be married, with 66% reporting a spouse, up 5% QoQ. Over a quarter of women borrowers (28%) were first-time home buyers, with 34% aged 18-34.

“We’re seeing more and more women from younger generations focusing on their careers, delaying childbearing, supporting their families financially, and showing a deep resolve to get on the property ladder,” comments Amy Jo Plummer, Maxwell VP of Customer Success. “Increasing percentages of women borrowers is a trend that’s only likely to accelerate, and lenders who want to serve more home buyers would be wise to cater to this powerful demographic.” 

As women’s goals, opportunities, and choices are redefined by a new generation, there’s every reason to believe this faction will continue to pursue homeownership. In particular, women 18 to 24, who have yet to reach peak home buying age, may begin to match homeownership rates of their male counterparts. This trajectory makes it imperative for forward-thinking lenders to support, cater to, and connect with this demographic.

Young & first-time home buyers

Millennials and Gen Zs have notoriously encountered challenges on their journey to homeownership. While many continue to rent, Maxwell data shows that both 18 to 24-year-old and 25 to 34-year-old borrower segments are substantially increasing in percentage. The two-year trend for these age groups combined shows an increase from roughly 27% to 34% of all home buyers, while all age groups 35 and above declined.

The reason for a rise in younger home buyers may be due to the ultra-low rates created by the pandemic: The vast majority of older home buyers, who are more likely to have purchased pre-2020, have refinanced into sub-3% interest rates. That means current rates are highly unattractive to many home buyers 35 and above. Conversely, younger home buyers may simply see today’s higher rates as a new normal.

“With the past two years especially difficult within the market, it’s encouraging to see younger borrowers increase in percentage,” says John Paasonen. “Given their resilience to low inventory and high rates, it’s all the more likely that we’ll see this segment continue to accelerate their market share as conditions recover.”

As inflation declines—and if Fed language becomes less hawkish—lenders may finally see interest rates begin to deflate. At that time, the industry needs to be ready to serve this segment a top borrower experience geared towards a young, tech-forward audience, along with loan products that cater to their needs.

“First-time home buyers make up a growing percentage of what volume is leftover,” comments Chris. “Seeing this trend, lenders may want to focus on certain offerings, such as down payment assistance (DPA) products and high LTV-type products. I don’t think we’ll get reprieve from the lock-in effect we’ve been seeing for quite some time, so we need to bring products to the people rising in the current marketplace.”

Learn more in our new guide

Our newest guide includes advice from Maxwell Co-founder & CEO John Paasonen, mortgage industry veteran Rob Chrisman, theLender Co-founding Partner & EVP Chris Ledwidge, and more to help you drive fresh leads, find new borrower business, and renew your business plan as the market turns a corner.

Get your free copy to learn:

  • 3 key tips to help your lending business fill its pipeline with new leads, taking into account fast-changing marketplace trends
  • The borrower segments that are still rising in the housing market—and ways to better connect with these audiences
  • How to better leverage data to avoid analysis paralysis and make confident business decisions
  • Why serving more markets, including affordable locales, will be invaluable to winning borrower business as the market continues to evolve

Get your free copy of Maxwell’s 2024 Lender Playbook: 4 Tips to Drive Profitability in a Recovering Market

By submitting this form you are agreeing to our Privacy Pledge and Terms of Use. At Maxwell, we’re committed to your privacy. You may unsubscribe at any time.

eBook Download

This field is for validation purposes and should be left unchanged.

Get the latest and greatest industry news, delivered straight to your inbox.

By submitting this form you are agreeing to our Privacy Pledge and Terms of Use. At Maxwell, we’re committed to your privacy. You may unsubscribe at any time.

This field is for validation purposes and should be left unchanged.