Today's homebuyer isn't just navigating a difficult market, they're navigating it under pressure. Rising costs, tight timelines and an often-confusing process are reshaping how borrowers think, feel and make decisions. At the same time, their expectations of lenders are evolving fast.
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At the same time, loan officers are seeing a different side of the story highlighting a critical gap in borrower understanding that lenders can't afford to ignore.
In this Leader's episode, Dave Howard of ServiceLink sits down with Janet King to unpack what today's data reveals about borrower behavior and what it means for your strategy. The conversation explores:
- How financial pressure is reshaping buyer behavior, compromises and decision-making
- The aspects of the homebuying process causing borrowers the most stress and where knowledge gaps remain
- How to close the expectation gap with clearer communication and transparency
- What borrowers really want from digital tools and where human interaction matters most
- How growing home equity creates new opportunities to strengthen borrower relationships
Walk away with practical insights to better understand today's homebuyer mindset and deliver a more seamless, supportive and confidence-building borrower experience.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Janet King (00:10):
Hello everybody, and thank you for joining us today. I'm Janet King, Senior Vice President of Content Strategy at National Mortgage News, and I'll be your host for today's leaders episode. Today we're going to be exploring insights from ServiceLink's 2026 State of Home Buying Report. It's especially timely as today's home buyers are navigating a challenging and complex market and they're turning to lenders for a simpler, more digitally efficient experience. So joining me today to unpack this data and what it means for lenders is Dave Howard, Executive Vice President Origination Services at ServiceLink. Welcome, Dave.
Dave Howard (00:50):
Janet, thank you for having me. It's a pleasure to be here today.
Janet King (00:54):
It's great to have you here. So to provide everyone with a little bit of context, can you just share a little background on the research goals and methodology and any major differences this year? Because this is an annual survey for you guys, right?
Dave Howard (01:08):
Yeah, it is. And it's something we're really excited to do in the six years we've been doing this survey. And this year there's a little bit of a different twist on it, Janet. As is typical, we interview about 1,500 respondents nationwide of people who have purchased homes within the past couple of years. These are borrowers and members of credit unions who've recently engaged in transactions. This year we made the addition of more than 500 loan officers to become part of the survey as well. And we'll find that there's some interesting things to note there in terms of the gaps between perception a little bit between borrower members and loan officers as well. So happy to get into that.
Janet King (01:55):
Oh, that's great. I love that you guys have the dual perspective from the borrower and lender perspective, so I'm really excited to talk about that. Okay. So before we dig into the data specifically, I want to just start with the big picture. And from where you sit from your perspective on lending origination services, what do you see as some of the biggest trends that are shaping how lenders are operating today?
Dave Howard (02:20):
Well, with volumes being what they are, everyone in the lending community is looking to take costs out of the origination cycle and also compress the timelines so that they can reduce days on loc, reduce the time it takes to get from application to origination and funding. The key difference here now is that we have to look at doing that without sacrificing the borrower member experience and keeping an eye for the lender on profitability, of which it's always on. But to do those things together and then also ensure that we're delivering from the lending community an exceptional experience as part of that, that's really the challenge.
Janet King (03:10):
Right. I mean, that definitely introduces some new pressures for lenders. I think one of the most interesting dynamics in the report this year was that it found that even though buyers are financially stretched and under real pressure, they're still highly motivated to achieve home ownership and they seem to be willing to make some significant compromises to make that dream happen. So can you first share some of the financial pressures that are shaping how borrowers operate today and then maybe speak a bit to the kinds of compromises they're making?
Dave Howard (03:46):
Sure. Yeah, your intuition is spot on in terms of what folks are going through. The top area in terms of respondents to our survey that they identified were really high prices. 53% of them said the high prices in the market today were really, really challenging creating a lot of stress. In addition, the next level down, 49% indicated that the high rates were a challenge for them. Now compounding that, those two elements together is really a challenge on available volume in the marketplace from which to have opportunity to choose from, which really drove our respondents in the survey to put themselves in a position where they felt they had to overspend in order to achieve their goals and get what they wanted. And so that was actually tagged 77% of the time. The respondents indicated that they had to spend more than they were intending to become part of this cohort in home buying and homeownership process.
(04:57):
And furthermore, 10% of that cohort as well spent almost $80,000 over their intended target for which they were looking to buy. So the pressures are real and they're having real outcomes and results on this community of borrowers and members.
Janet King (05:18):
That's interesting. I mean, that is a big delta and is clearly going to put some pressure on other aspects of their lives. So I'm curious, so there's this real financial pressure that they're feeling. What kind of compromises are they making even beyond having to spend so much more?
Dave Howard (05:37):
Yeah, so it's interesting. They changed a bit where they're looking to the types of homes that they're looking to purchase. So they had to make compromise there, maybe not get the ideal that they were looking at. So they would have to make some compromises there. They'd also have to look at alternative sources to come up with some of the funds that they would need to participate in the marketplace. 27% said they had to pull out funds from their 401 in order to come up with some of their down payments. And so that was a significant compromise that they had to make. Some of them, 21% said they had to make a sacrifice on the number of bedrooms that they wanted in the home as well, or that they would settle for in the home as well before they were able to complete their purchase. And those are just a couple of examples of what they had to do.
Janet King (06:46):
Are you seeing people in the data more often trade off location for type of house or size of house, or is it kind of all of the above?
Dave Howard (06:56):
It's a little bit of all of the above, but interesting aspect that we saw in survey this year, Janet, was really the strength around pets and the value that pets play in the lives of borrowers and members who are in the home purchase market. There was not a lot of sacrifice that they were willing to make on behalf of their pets. And so 54% of the pet owners said buying a home with a fenced and yard was a priority and they made sure that they were working towards that goal and they would accomplish that goal as well. And they were also looking for walkable communities and perhaps a bigger house, but that was all on behalf of the furry member of the family that they were buying.
Janet King (07:55):
That's great. So they might give up a bedroom, but there better be a yard for their dog or their cat. That's great.
Dave Howard (08:01):
It's that plus.
Janet King (08:03):
I love that. Okay. So let's move on to some of the financial factors that are causing stress for home buyers. And you've talked a little bit about this. They have to pay more. They're looking for alternative ways to fund this, but it seems to stretch across the entire home buying process, the financial factors that they have to consider. So what are some of the top stressors that home buyers are seeing from a financial perspective? Yeah,
Dave Howard (08:29):
That's another great question there, Janet. It really touches on the process and you led right in with that and that is the important thing. In our respondents, nearly on five cited that the home price offer and the negotiation process were a significant point of stress and challenge for them getting from point A to point B that really affected them. A further 15% really wired in on understanding the paperwork. It's not a purchase, it's not a transaction that we engage in every day. So the understanding of the process and the stress of negotiation is a huge transaction for anyone to be going through. For most of us, it's our single biggest investment that we make. So to have the challenge of the price offer negotiation, understanding the paperwork, 12% said the closing process was unfamiliar with them and a stressor and a challenge. And then that same percentage indicated understanding the rate environment and how that would affect them financially was also a challenge.
(09:52):
Lastly, 10% kind of wired in on, am I at the right place? And what I mean by that at the right place is, am I working with the right lender and do I have the right agent? So despite our efforts and focus around technology and around enabling the process, there's still a personal element that's involved in this and that is a real challenge for lenders, loan officers, all participants in the ecosystems to understand that they need to cover off not just on the technology, but the personal aspect as well.
Janet King (10:30):
Was there anything in the research that would point to trusted sources of information for knowing if they have the right lender, are they in the right place? I mean, are they going to friends and family? I mean, I would assume there's probably a big portion of that, right?
Dave Howard (10:50):
Yeah, they do. They do go to friends and family quite a bit. And what we found, another part of the survey that I thought was really kind of interesting is when we were asking about these issues, the non-financial issues was really the gap between what the respondents were saying were their challenges and where the loan officers were saying some of their challenges were about the same thing. So when we talk about things, let's say for example, a borrower or member's knowledge about taxes and their preparation for understanding the situation they're going to get into related to taxes, what the borrowers and the members thought that they understood and what the loan officers think of those folks understanding was about a 15-point gap in terms of what the borrowers think they understand and what the loan officers think the borrowers understand. So that I think was one that kind of jumped out to me as that difference right there.
Janet King (12:05):
Okay. So Dave, well, borrowers still rely on trusted relationships and really value the human interaction in this experience. They also expect to leverage digital tools and processes when purchasing a home. So what are you seeing in the research about borrowers' expectations for digital tools today and a part two to that question, how do you see that relationship evolving, especially with the rise of AI?
Dave Howard (12:32):
Well, sure, Jen, I'd say really our research exposed three things in terms of priorities for borrowers and members, that was really around time savings. It was around convenience and it was around flexibility. So everybody wants those things. So what's the technology that's going to help them deliver that? So we saw a very high percentage of our respondents really looking to drive digitization within the e-signing and closing capability. So 88% said they wanted some measure of digital signing as part of their process now, but that's not everything. Certainly the ability to schedule and manage the events that they're responsible for or they're going to be interacting with third parties digitally as well, 87% said they wanted to be able to control that or on the behalf of their convenience and flexibility by having the ability to digitally schedule that on either a tablet or a phone or however they like to interact from a technology standpoint, a laptop or something like that.
(13:49):
And that was important enough to them that it is influencing where they may want to do business with lenders who can have and deliver that type of capability. That ability for convenience and flexibility on the exact date and time that they want those events to occur was really critical to them. Where they're looking for AI to participate in the automation of events in the process to even take things out of the process entirely through automation, wherever that is possible so that they can reap the benefits of speed and efficiency that way. But then they're also using chatbots and things like that in their own research into the deal that they're getting from the lender. It also has a bridge on the education for what they can and should expect in their interactions in the process. So really to facilitate, but then also a bit of an educational crutch as well.
Janet King (15:03):
Exciting opportunities ahead for sure. So another thing that I found really interesting in your report is that many recent buyers are building meaningful equity in their homes. So what opportunities do you think that creates for lenders to really strengthen those relationships beyond the value of that first mortgage transaction?
Dave Howard (15:28):
So we've seen certainly an acceleration in home equity lending, but we're also seeing that from a lender opportunity standpoint, participating in a home equity lending process or helping to extract that equity for borrowers and members to help them achieve their priorities is another opportunity for them to stay connected to that individual across their lifetime financial journey and build more relevance for them in their lives. They're looking for the opportunity to create improvements for the homes that they bought. They're looking to pay their debts, they're looking to potentially start a business and they're looking to potentially fund a vacation. And home equity certainly is a source, one source that they might be able to tap into in order to do that. But just as much on your typical first mortgage origination transaction, the pressure on the lender to compress the cycle time for the home equity origination is equally strong.
(16:48):
The borrower expectations that they should be able to extract that home equity loan much faster than is typical today are having lenders look at things like instant property information that they can use either their rules engine or AI to assess to determine whether or not they can act on that loan faster than typical reporting happens. And we participate in that as well in offering those areas.
Janet King (17:23):
So for lenders, you really need to carry these lessons across the entire portfolio
Dave Howard (17:28):
For sure.
Janet King (17:29):
Reflecting on all of this data, and I know there's so much that we are only going to skim the surface on today, but we've talked a little bit about the financial pressures that our buyers are facing and the stress and the reliance on trust as well as the demand for a digital experience. So sort of that humanized digital experience, what surprised you the most?
Dave Howard (17:52):
Well, really when you roll it all up like that, Janet, I would say it's the drive and the resilience of this cohort. I mean, this is a tough market right now, but these folks are in this market and they are motivated to participate. They are pursuing their goals and their dreams despite some of the challenging pressures that we were speaking of earlier with high pricing, low inventory, challenging rates, frustration with the process and having to extend their budgets, but they're doing it and they're out there. And the lenders who are most focused not just on the process and the technology, but on the experience that these people will have will be the winners in this marketplace because there's no shortage of technology that's available and capable to get you from point A to point B, but it's that blend around the experience and are you enabling the things that drive the experience of value that these borrowers and members want to have that will hopefully put them in a winning position?
Janet King (19:14):
So with that in mind, I mean as kind of a closing thought, are there any specific things that you think lenders should be doing differently to make sure they are balancing that human experience with the digital? Any sort of parting advice before we close this out today?
Dave Howard (19:37):
Yeah, I really think it's going to end up being the ones who are thinking outside of the normal. Everyone wants to compress cycle times. That makes us more profitable in the industry as a lending community. We all want to ingest AI, whether that's for targeting the appropriate lenders or helping us process faster, but really the lenders who will win will be the ones who can do those things without not just not sacrificing the experience, but improving the experience for the borrowers and the members that they'll be interacting with. Our survey pointed out a number of priorities, but certainly the ones that kind of come back to me a bit on this is improvements in the communication and improvements in the experience. And so technology needs to drive us to that. The compression needs to drive us to that because they've shown they're willing to fight through so much noise to cut through the noise to get to what they want.
(20:55):
We need our environment, our ecosystem, our technology to deliver on the communication and the experience part of it in order for lenders to win in this marketplace. They've shown they're willing to spend more, they've shown they're willing to take higher rates, but what they do want is that communication and that experience.
Janet King (21:21):
Great. Well, thank you. I mean, in a lot of ways it seems like a very positive story for lenders despite some of the challenges that are out there. And it seems like there's an opportunity for lenders to really become that trusted voice, that trusted partner in that process and hopefully earn some long-term customers as a result of that as well. So I want to thank you very much for joining me today to discuss this topic. It was really great to have you here.
Dave Howard (21:48):
Thank you, Janet. I appreciate your time as well and we're optimistic for the future and what this market can bring and hopeful that we'll see many in the community coming along with us on it.
Janet King (22:01):
And I also want to say thank you to ServiceLink for sponsoring this leader's episode and just remind everybody in the audience that you can see the full report at servicelink.com and we hope that you will join us for future leaders episodes on National Mortgage News. Have a great day.