Women and minorities are turning toward virtual lenders for their mortgages, and for good reason: Digital, algorithm-based mortgage lenders discriminate about 40 percent less than traditional mortgage companies. The virtual lenders approve more minorities and women and often have lower loan costs. This affordable process is giving groups that are traditionally discriminated against in the homebuying process the opportunity to make the leap into homeownership, which is good news for home builders—single women are already a rising buyer demographic. Seventeen percent of borrowers in America were single females, according to the National Association of Realtors, and on the digital mortgage lender Better.com, the percentage of single females jumped to nearly 25 percent.
Studies show that digital, algorithm-based mortgage solutions discriminate less than more traditional lending models (about 40% less, in fact)—ultimately enabling more approvals of minorities, as well as lower loan costs for those borrowers as well. New data released this morning supports these findings even further.
According to a report released by Compass and digital mortgage lender Better.com, the company has seen a massive uptick in single female homebuyers using its algorithm-based lending platform. Over the last year, the number of single, minority female borrowers has increased 500%, while the number of single women borrowers in the 30-to-40 age range jumped 450%.
Over the same time period, nearly a full quarter of the lender’s borrowers were single females. That’s more than the industry average of 17%, according to the National Association of Realtors. (Only 9% of home sales last year came from single males).