Scrounging for loans? You’re not alone. With same-lender volume down nearly 50% year-over-year, according to Maxwell data, the market has become a fight for survival. And to complicate challenges, the sheer volume of borrowers locked into 2-3% interest rates has created a lock-in effect, where potential sellers are putting off moves to avoid higher interest rates.
Inventory issues, inflation, and the fast pendulum swing of rates make today’s lending environment unique—and with those changes need to come changes to your lead funnel. The old strategies that got you through previous market cycles won’t work today. It’s time to reinvent the way you attract, convert, and service borrowers.
Follow borrower life events
Make it a priority to deeply understand how American demographics are moving and where opportunities still lie to capitalize on remaining loan volume. This means thinking about your lead sources and how to creatively structure your deal funnel to capture segments that are continuing to relocate and that need new housing or lending options.
For instance, lenders should consider following common life events of everyday Americans, including family creation, downsizing, and empty nester relocations.
“Try building relationships with attorneys who help with divorces and family events that drive transactions,” advises Bryan Traeger. “If that doesn’t pan out for you, move on and try something else. Don’t think what’s worked in the past will work in the future. Think about that conversion: Who could give me leads and what leads are converting into borrowers?”
Dig into relocation trends
With housing costs on the rise, Americans are overwhelmingly flocking to more cost-effective locales. A recent Realtor.com report, for instance, found that more than 60% of house shoppers searched for listings outside of their metro areas in Q2 2023. This rapidly growing trend is unlikely to slow down; with housing affordability a top concern and inventory a growing issue, relocations to specific cities and states are expected to drive home buying in coming years.
Due to this pattern, it’s crucial to reconsider the markets you serve. If not, you may miss out on remaining volume and pigeonhole yourself into markets that are slow to recover.
“Maybe you’re only licensed in California currently,” says Chris Ledwidge. “Well, now is the time to figure out how to serve the markets where people are buying. Pull data on the top 5 states growing in population and get NMLS licensed there. If you’re isolating yourself to one market, you’re going to have a hell of a time in production and growth.”
Pair technology with tried-and-true strategies
What makes the difference between lenders shuttering their doors and those remaining viable in today’s market? According to industry expert Rob Chrisman, it’s a combination of tech-powered solutions and good, old-fashioned human connection.
“The same set of circumstances are facing every originator out there, whether they’re at a depository bank, a credit union, an independent mortgage, or a mortgage broker: high rates, low inventory, low margins, and a high cost to originate,” comments Rob.
“What is different, however, is what loan officers are doing about it. Successful originators are not ignoring advances in technology, but they are choosing which tools will best suit them and their clients. They are reaching out, making sure that clients feel welcome and well informed. And they are doing business the old-fashioned way, with thank you notes, handshakes, being knowledgeable, and providing service after the loan funds.”
Home buyers today—especially millennials and Gen Zs, who currently make up the largest segment of borrowers—report valuing a combination of tech-forward features and human-led support. Does your lead funnel incorporate both? If not, you’re likely turning off prospects before they get in the door.
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