Home Mortgage Lending: Housing Affordability Mindset and Relationship-Focused Service Set Community Banks Apart

As interest rates and property asking prices continue to rise, it’s becoming increasingly difficult for young adults and growing families to afford a home. Recently, the average interest rate for a 30-year fixed mortgage topped 8%—the highest since 2000. Despite the soaring rates, community bankers are helping Americans, especially first-time homebuyers, achieve the dream of owning a home.

With nearly 50,000 locations nationwide, community banks are often referred to as America’s favorite lenders. Part of the preference has consistently been tied to community banks’ ability to meet customers where they are in their financial journey, rather than trying to fit them into a select number of product offerings.

Community banks offer financial flexibility and have a better understanding of a customer’s financial situation for the long haul.

But that’s not all.

Community banks promote responsible housing affordability options by providing a range of mortgage options, reduced fees, and even more pliable qualification standards. They recognize that income and employment in our modern economy can’t be solely defined by a W-2 or 1099. Plus, in many areas of the country—specifically more rural areas—no property is alike, so they have a proven track record of being able to underwrite loans that may not fit into a normal box.

That means home buyers from different geographic areas, economic backgrounds or employment experiences can look to a community bank for relationship-driven banking that can help them go further.

“The standardized mortgage play given by large nonbank mortgage companies doesn’t work for everyone—especially in today’s market,” says ICBA Senior Vice President of Housing Finance Policy Ron Haynie. “It’s more difficult to qualify now because of the high mortgage rates. Every little fee and additional charge from independent mortgage companies makes it harder for young adults to take out a loan for their first home. However, community banks are safer, more flexible, and more relationship-focused compared to other home lending options.”

Community banks serve an important role in providing local financial services, according to the Federal Deposit Insurance Corporation (FDIC). It’s clear that community banks’ responsible flexibility, resilience and personal connections have made it simpler for homebuyers and will continue to do so under today’s mortgage rates.

Only a phone call, email, or short drive away, community banks are aware of the difficulties plaguing young adults and are prepared more than ever to help Americans buy their first home and plan their financial futures.

To find a community bank near you, visit our locator at banklocally.org.