Built Answers: How to Thrive in a Slowing Market

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Built Team
PUBLISHED: 09/27/2018

The housing market has hit a little lull. It was inevitable. July marked the 77th consecutive month of median home price growth (that’s more than 6 years), so we’ve known that prices would eventually hit a ceiling.

As a lender, how are you responding to market shifts? What do you do if new mortgage applications dry up and higher interest rates take a chunk out of home refis?

If you’re like our clients, you realize you can’t sit around doing nothing. The housing demand hasn’t gone away; it just looks like things may have hit a price obstacle. We already know that new construction needs to continue and contractors are excited about the prospects for 2019 and beyond. But we’re bumping up against labor issues in a huge way.

So, what’s a lender to do?

Question: I see the value in construction lending. I want to stay committed to it while making a profit for my institution. How do I do that?

Let’s face it, flattening home prices and sales numbers put additional pressures on builders and lenders alike to find ways to generate profit for their efforts. The last few years, broadly speaking, have been kind to anyone in the housing industry, but things are beginning to tighten up a bit.

Efficiency is growing increasingly more important. As is having a distinct value proposition or differentiator to separate from competition. There is sufficient capital available to fund our construction needs; it’s just a matter of creating lending situations that benefit everyone involved.

When it comes to efficiency today, for our money nothing beats the right technology. Yes, we’re a technology company so you might consider us biased, but we’ve sat with lenders of all kinds in the last few years and have gotten to know a lot about their current needs. And what we’ve found is that the best way to fix processes that take up valuable time is by replacing outdated models with something new.

I’ve covered it extensively here in Built Answers: The right technology can save time and money by reducing manual, non-value added data entry tasks, improving compliance, giving access to previously unavailable data and reporting, and integrating with your existing systems.

Even better, everyone involved in the loan process can work from the same place, including inspection vendors and consultants, borrowers, and builders. When you use a platform that makes everyone’s life better, they’re going to trust you more today and in the future, no matter how the market is trending. When builders look to secure funding for their next project, they’ll look to the lender that was able to deliver their draws more quickly the last time around, helping them to complete projects on schedule and at budget.

It’s that simple: Separate from the competition by delivering a better experience — to your clients and to your employees. You’ll gain efficiencies today and create relationships that will remain valuable during both market contraction and expansion.