United States Home Loan Markets, 2018-2022 & 2023-2028: Digitalization and Automation Revolutionize the Industry Landscape

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Oct 04, 2023, 13:15 ET

DUBLIN, Oct. 4, 2023 /PRNewswire/ -- The "United States Home Loan Market Competition Forecast & Opportunities, 2028" report has been added to ResearchAndMarkets.com's offering.

The United States home loan market is expected to experience significant growth to 2028

The United States home loan market is undergoing a transformation, driven by several key factors that are reshaping the lending landscape. These factors include a growing pool of potential homebuyers, the automation of loan processes, and the pervasive trend of digitalization.

Home loans, typically extended by financial institutions, serve as the financial backbone for individuals aspiring to acquire residential properties. These properties can range from completed, move-in-ready homes to those still in construction phases. Banks and non-banking financial companies (NBFCs) both offer home loans, often determining interest rates based on the borrower's creditworthiness. These loans commonly come with lengthy repayment periods of up to 30 years, structured through equated monthly installments (EMIs).

In recent years, the demand for mortgages in the United States has experienced a notable upswing, primarily catalyzed by heightened home purchasing activities during the COVID-19 pandemic. Consequently, this surge has generated substantial demand within the purchase market, attracting banks, nonbank lenders, and investors operating in the mortgage sector.

Furthermore, despite the economic repercussions of the pandemic, the desire for homeownership in the United States remains unwavering. The broader economic expansion and the growth in the number of households have contributed to the increasing rate of homeownership.

Notably, 2020 witnessed a 2.6% annual uptick in homeownership, welcoming over 2.1 million new homeowners into the fold. Geographically, the Midwest and South regions of the United States exhibit higher homeownership rates compared to the Northeast and West. With this surge in homeownership, a concurrent rise in the demand for home loans is anticipated.

Automation has emerged as a pivotal force in streamlining the home loan process, substantially elevating the overall customer experience. The mortgage industry has eagerly embraced technology to expedite and simplify mortgage applications, thereby widening access to home financing and home-buying services.

A cornerstone of this technological revolution is digitalization, with the U.S. digital payments sector expanding at a commendable rate of 23%. These technological strides are designed to expedite mortgage applications, curtail expenses, and enhance the overall client journey. Consequently, the escalating wave of digitalization is poised to further propel the United States home loan market.

The ascendancy of nonbank lenders has introduced a seismic shift in the market landscape. Nonbank lenders have emerged as a credible alternative, especially for borrowers seeking refinancing options. Over the past decade, nonbank mortgage lenders have not only gained market share but have also eclipsed traditional banks in prominence.

In 2020, seven out of the top ten mortgage lenders in the United States hailed from the nonbank sector. These lenders have strategically invested in diverse technologies to fortify their operations, spanning from platform modernization to automated compliance solutions. Consequently, the continued ascent of nonbank lenders is set to stoke the growth engine of the home loan market.

In summation, the United States home loan market stands at the cusp of substantial growth, underpinned by a confluence of factors, including surging demand, automation enhancements, and the burgeoning influence of nonbank lenders.

Market Dynamics

Market Trends & Developments

Increasing number of fintech companies
Rising focus towards loan sector by Bank and NBFCs
Increasing construction activities
Rapid urbanization
Attractive marketing strategies

Drivers

Increasing home ownership
Automation in loan process
Growth of nonbank lenders

Challenges

Security concerns
Surging competition

Competitive Landscape

Bank of America Corporation
JPMorgan Chase & Co.
Citigroup, Inc.
Wells Fargo & Co.
U.S. Bancorp
PNC Financial Services Group, Inc.
American Express Company
Ally Financial Inc.
Truist Financial Corporation
Goldman Sachs & Co. LLC.

Voice of Customer Analysis

Sample Size Determination
Respondent Demographics
By Gender
By Age
By Occupation
Brand Awareness
Factors Influencing Loan Availing Decision
Sources of Information
Challenges Faced

Impact of COVID-19 on United States Home Loan Market

Impact Assessment Model
Key Segments Impacted
Key Regions Impacted

Report Scope

United States Home Loan Market, by Type:

Home Purchase
Refinance
Home Improvement
Construction
Others

United States Home Loan Market, by End User:

Employed Individuals
Professionals
Students
Entrepreneurs
Others

United States Home Loan Market, by Tenure Period:

Less than 5 years
6-10 years
11-24 years
25-30 years

United States Home Loan Market, by Region:

South
Midwest
Northeast
West

For more information about this report visit https://www.researchandmarkets.com/r/efxqax

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