Even as artificial intelligence (AI) becomes more prominent in the mortgage industry, most millennial and Generation Z homebuyers are hesitant to rely solely on a fully automated application process to get a loan, according to a new study.
A survey from mortgage technology firm Cloudvirga, conducted in September, gathered insights from more than 1,000 millennial and Gen Z respondents, the majority of whom were first-time buyers under the age of 40. Although most respondents expressed satisfaction with the digital tools offered by lenders — and expect more automation in future transactions — 60% said they would switch lenders if AI played a significant role in the process.
Cloudvirga CEO Maria Moskver highlighted an important nuance in homebuyer expectations, urging lenders to take a balanced approach between new technology and automation while still offering human assistance during the application process.
“They want the ease and efficiency of automated platforms and a borrower-friendly user interface, but they are still relying on loan officer involvement,“ Moskver said in a statement. “Clearly, while AI is an increasingly major component of digital mortgage origination, it’s still not a trusted system for many borrowers.“
Moskver referred to a key result in the survey indicating that homebuyers still want human assistance despite a growing desire for more tech. About 58% of respondents still relied on loan officers to guide them through the process. Moskver expects that percentage to decrease over time as digital tools become more common.
Aside from AI, technology and automation is still favored by first-time homebuyers, with 63% wanting a better digital experience and 77% who prefer a fully digital process.
Moskver attributes these stats to a growing number of tech-savvy, first-time buyers who expect a high standard of digital quality that matches their everyday lives.
Digital tools played a significant role in simplifying the loan application process for homebuyers. Homebuyers received real-time updates on loan status, automated document submission and access to e-signature tools. Digital document submission tools stood out as the most valued among homebuyers, with 91% using these features to update all of their documents.
The survey clearly suggests that homebuyers desire a digital experience augmented with human support for loan applications. As AI continues to save lenders time and money, only time will tell if they take heed. According to Fannie Mae, 30% of lenders have adopted or tested AI software — and this number could grow to 55% in 2025.
I think HW should do a survey on how people feel about having a complete computerized/AI valuation of their home instead of having a traditional, boots on the ground appraisal completed, by a seasoned residential appraiser.
That would be a survey worth doing!!! Since Fannie/Freddie are pushing the narrative to move towards complete computerized valuations.