Closing the Gap to Homeownership
According to Simply Insurance, about 66% of Americans currently own a home. The independence and pride of owning your own home, while building equity, receiving tax benefits, and establishing stability, drive people to purchase a property. As of 2022, 26% of homebuyers were first-time homebuyers. Most first-time buyers begin their home buying process by searching online through websites like Zillow, Redfin, etc, not realizing that the home-buying experience begins before looking for a property. Below are quotes from the survey launched to understand why people struggle when buying a home for the first time:
“There were a lot of steps that I had no idea about during the process”
“Typically buyers are not prepared for the process”
“There were a lot of expenses I wasn’t aware of”
This lack of education and knowledge of the home-buying process can cause frustration, confusion, and stress for first-time homebuyers.
Disparities in homeownership are especially significant by age and race. 65+ year-olds have the highest homeownership rate among all age groups at 79%, while homeownership under 35 years old is only 38%. The white homeownership rate is among the highest at almost 75%, while homeownership rates among Black and Hispanic groups are 45% and 48%, respectively. Ultimately, Homeownership is the principal source of wealth creation, thus, translates to an even larger wealth gap for younger generations and marginalized communities.
First-time homebuyers should be educated on the home buying process and connected directly to resources that address barriers to home ownership, especially for younger generations and minoritized communities.
Based on a preliminary user discovery survey with real estate agents and first-time homebuyers to validate this problem, the following key insights were found:
Top 3 challenges in the home buying process:
Quotes
Key insights:
Challenges & Quotes
- User #3: “I personally found saving a large sum of cash to be the most difficult”
- User #4: “Although many lenders have down payment assistance programs, individuals with higher debt-to- income ratios do not qualify for them. This then requires individuals to have to come up with down payment funds independently while simultaneously paying off debt and arranging for moving costs.”
2. Real Estate Professional
- User #2: “Finding a competent Real Estate agent is tough. The market is saturated with mediocre agents who are just looking for a commission”
- User #4: “My real estate agent did not try hard enough. He primarily sold luxury homes but once he saw my budget, he only sent me 500 sqft condos … I ended up finding my home on my own and he did not negotiate the price or the contract … instead of explaining the home buying process to me, he gave me a pamphlet to read … my real estate agent didn’t even stay with me while I was signing my mortgage documents.”
3. Credit score
- User #5: “I was led to believe that if you have negative things on your credit, it would fall off in a few years and not really affect it. I was really upset when I had to go back and pay those things off.”
- User #6: “A lot of my potential clients have credit issues which prevents them from getting a pre-approval, even if they can comfortably pay the mortgage based on their existing expenses.”
4. Lack of Knowledge
- User #2: “The whole system is stacked against you to maximize how much you spend because they want to make more money.”
- User #6 “For the most part, first-time home buyers do not know anything. I typically have to re-explain things
According to preliminary user research, first-time homebuyers are unaware of the home buying process, and several factors hinder and/or delay their home purchase. Creating a product that will educate first-time homebuyers on the homebuying process, and connect them to resources that mitigate barriers to homeownership, will empower first-time homebuyers to be confident and make informed decisions while navigating the homebuying process.
Market research, user insights, and user pain points led to the development of the product, which educates and connects first-time buyers to resources that will facilitate a seamless homebuying process. The hypothesis is that if first-time buyers are informed and have access to resources that can help them navigate challenges during the homebuying process, they will experience greater confidence in finalizing their home purchase. It will allow first-time homebuyers to make more informed decisions and decrease their frustrations during the homebuying process. Due to technical feasibility and time constraints, the scope of the resources are those that is available nationally and in the state of Florida.
HomeStretch is a web app that educates first-time homebuyers on the homebuying process and connects them to resources that eliminate barriers to homeownership.
HomeStretch has four key features:
Homepage
Profile
Education Center
Resources
To gain feedback on user experience of the platform, an unmoderated usability test was conducted with the Hi-Fidelity design. The usability test was conducted with 3 participants who were asked to perform 5 basic tasks.
Insights From Usability Test
The users understood that the purpose of the platform was to educate people, particularly first-time homebuyers, on the homebuying process. They found the platform very intuitive and easy to navigate.
Feedback From the Participant.
After receiving feedback from users, we iterated on the design to address their concerns.
Our team is in the process of discussing the next steps. We found the experience to be both enjoyable and educational and received positive feedback from users about the usefulness of the platform. If we continue to advance the platform, our goal is to improve existing features, add new ones based on user feedback, and launch a mobile version for added convenience.
Co.lab was a great experience for me. I’ve been able to build on some of my technical skills and I’ve gotten a feel of what it’s like to work in a cross functional team.
It was interesting to experience something close to real world projects and feel how challenging it can sometimes be. It was a great opportunity to benchmark your soft and technical skills and identify your strengths and weaknesses. Personally, I detected some areas, especially in my soft skills that I can improve, like communication skills, time management, etc.
We learned the importance of clear communication and teamwork. Although challenging at times, we were open and expressive about individual ideas, transparent and honesty sharing constructive feedback, and took accountability for actions.
The significance of pivoting became evident to us during our project. When unexpected technical issues arose, we shifted our strategy to overcome these challenges. Pivoting required us to be flexible, to respond quickly, and to determine what was most crucial. This allowed us to concentrate on the core features of our product and launch successfully
Collaborating with a team composed of people with diverse backgrounds and varying work styles can present both difficulties and opportunities. A key challenge for us was harmonizing differing work practices and modes of communication. However, this diversity meant that we each brough unique experiences, skillsets, and ideas to the table. Through problem-solving, understanding, and the willingness to work together, we were able to navigate these challenges and achieve success.
