The rising number of nuclear families, ease of affordable housing, and attractive interest rates are the driving factors for the growth of the global housing loan market during the projected period. According to the TechSci Research report, “Housing Loan Market – Global Industry Size, Share, Trends, Competition, Opportunity, and Forecast, 2018-2028F,” the global housing loan market is propelled to grow as interest rates on housing loan are typically flexible based on the consumer’s feasibility in the loan repayment period. Higher borrowing limits and low-interest rates for housing loans are also attracting more customers, which is a significant driver of the market’s growth.
The Important Elements of the Housing Loan Market
An individual can use a home loan as a type of loan to buy a house. It’s also a contract between a borrower and a lender that essentially allows them to buy a house without paying the whole amount up front. Instead, they can put down a set amount (typically between 3% and 20% of the home’s price) and make smaller, fixed payments over a set period, plus interest.
Within the United States, after home prices nationwide reached record highs in recent months, rising mortgage rates have added much-needed pressure to the housing market. However, as mortgage rates have started to fall in recent weeks, many economists are divided on whether home prices will crash or continue to decline slowly through 2023. As buyers were “squeezed out of qualifying for a mortgage,” the overall existing-home sales decreased by 5.9% from September to October 2022, marking the ninth consecutive month of declining sales.
Artificial intelligence and machine learning are helpful in the home loan industry and contribute to greater geographic and socioeconomic diversity in the availability of home loans. The companies have highlighted how technology has helped reduce mortgage defaults due to widespread online collection practices implemented shortly after the COVID-19 pandemic hit. The impact on bank collections was significant. Therefore, the loan providers took substantial support from technological advancement, and all the EMI payments collection shifted through National Automated Clearing House (NACH) mandates or salary deductions, automatically debited on the due date set by the borrowers. This enables borrowers to pay conveniently through an online portal without visiting the bank. As a result, the upcoming year’s relative has a favorable situation compared to 2020.
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The global housing loan market is segmented based on purpose, end user, , tenure, region, and competitional landscape. Based on Purpose, the market is further fragmented into Home Purchase, Refinance, Home Improvement, Construction, and Others (Re-Sale, etc.). Based on End User, the market is categorized into Employed Individuals, Professionals, Students, Entrepreneur, and Others (Homemaker, Unemployed, Retired, etc.). Based on Tenure, the market is segmented into Less than 5 years, 6-10 years, 11-24 years, and 25-30 years. The market analysis also studies the regional segmentation, divided among North America, Europe, Asia-Pacific, Middle East & Africa, and South America.
The home purchase purpose segment had the highest growth in 2021. This is explained by the need to move to a larger home as family members grow, encouraging customers to apply for housing financing to buy new homes. Additionally, the rise in consumer living standards is a significant factor in the expansion of the housing finance sector.
Key market players in the global housing loan market include:
- Bank of America Corporation
- Charles Schwab & Co.
- Citigroup, Inc.
- Dewan Housing Finance Corporation Limited
- Goldman Sachs (Marcus)
- HSBC Group
- JPMorgan Chase & Co.
- LIC Housing Finance Limited
- Morgan Stanley
- Wells Fargo & Co.
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Among the regions, North America experienced the highest growth in 2022. This is attributed to an increase in the use of digital lending platforms by banking and financial services to enhance financing services in the region. The market in North America is also expected to grow due to the adoption of advanced technologies like e-signatures, artificial intelligence (AI), machine learning, and advanced analytics by companies that provide house financing services.
“Housing Loans are easy to avail, offer flexible interest rates, and set monthly payments. In addition, Housing Loan demand is not limited to purchasing a home, but certain loans include land purchase, plot purchase, construction, re-sale, and balance transfer. Moreover, online portals are a more favorable factor in the foreseeable future which are also expected to significantly contribute to the Global Housing Loan market in the forecast period.” said Mr. Karan Chechi, Research Director with TechSci Research, a research-based global management consulting firm.
“Housing Loan Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028F Segmented By Purpose (Home Purchase, Refinance, Home Improvement, Construction, Other ( Re-Sale, etc.)), By End User (Employed Individuals, Professionals, Students, Entrepreneur, Others (Homemaker, Unemployed, Retired, etc.)), By Tenure (less than 5 years, 6-10 years, 11-24 years, and 25-30 years), By Region,”, has evaluated the future growth potential of global housing loan market and provides statistics and information on market structure, size, share, and future growth. The report is intended to provide cutting-edge market intelligence and help decision-makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities present in the housing loan market globally.
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