The housing market is facing unprecedented times. With record-low interest rates and buyers acting faster than ever due to high demand, credit unions are looking for opportunities to stand out to homebuyers in a quickly evolving market. In just a year, mortgage interest rates went from an average of 3.65% in January 2020 to hit 2.656%, their lowest level ever, during the first week of 2021.
While rates now hover around an average of 2.90%, purchase mortgage lending remains strong, and competition between homebuyers is fierce. It can be a stressful time for many homebuyers, with a low supply on the market, increasing prices and rejected offers — but credit unions are meeting demand by positioning themselves to help homebuyers navigate the process. Members starting a relationship with a credit union want to know that they can count on them to exceed expectations, not only on home loans but with a wide array of products.
Let's take a look at the ways resourceful, forward-thinking credit unions are standing out to homebuyers.
Strong communication and transparency is the key to building trust with buyers. As marketing and customer outreach become increasingly modernized and automated, many credit unions embrace old-fashioned marketing and face-to-face interactions. First-time buyers are especially prone to be unaware that credit unions even offer home loans. In many cases, buyers rely on advice and referrals from realtors or turn to lenders recommended by friends and family.
Credit unions that prioritize outreach through a variety of online channels (website, email, social media, etc.) to build awareness and ensure that buyers are thinking of credit unions first for home financing. Once members are on board, offering both face-to-face interactions and online support for consumers are critical. With the financial complexity and stress of home buying, some customers prefer having a familiar face who can answer a complex question. Some consumers, however, prefer to speak to experts online and get their information digitally, so it’s important for credit unions to support each type of customer journey.
In this highly competitive housing market, homebuyers have never been more confused or eager for home loan information. Buyers are relying on their credit union to help navigate the home loan process. Credit unions providing informational home buying seminars and other educational opportunities are helping their members to learn what to expect and how their credit union's home lending department is helping to navigate their process.
Credit unions can also use this educational process to offer their members broader product options and full access to their financial services. A relationship with a happy homebuyer can easily build into a long-term working relationship, with members trusting their credit union to help with financial planning, savings accounts and more. Educating members on the wide variety of products your credit union provides increases customer loyalty and commitment.
While members are increasingly looking for a hands-on approach to customer experience, it's important for credit unions to continue to incorporate technology to make their products and processes more efficient.
Many educational programs, such as first-time homebuyer seminars, are being offered virtually to meet members where they are. Credit unions are utilizing data to identify which of their members are projected to prepay loans or are in the market to sell their home. Customer relationship management tools are being utilized to deliver specific data and personalized content to individual customers.
As any credit union knows, it's important to cast a wide net and target a range of customers, including those that are low-income or non-English speaking. Many credit unions are incorporating multilingual video seminars or free financial education services.
Additionally, credit unions that incorporate mobile payment apps allow homebuyers to access their finances in quick order with reduced waiting times, which is a great way to improve the customer experience.
More than any other factor, homebuyers often look to availability when choosing a lender. A present, hands-on credit union that harnesses technology to benefit their members, provide superb customer service and offer educational resources to help navigate the home buying process will always be best positioned to solve their members' needs.
Credit unions that prioritize standing out from traditional banking options in this highly competitive market will not only exceed expectations with members buying a home, but will likely create long-term and loyal customers.