There are a lot of elements that go into a homebuying decision beyond issues concerning finance. The 2026 ServiceLink State of Homebuying Report examined the perspectives of mortgage borrowers and loan officers to understand the psychology of homebuyers facing economic uncertainties, elevated costs and a multitude of digital tools involved in the process.
The report revealed the practical motivations and psychological triggers that often drive buyers’ decisions about the professionals they utilize and the homes they purchase. These include a desire for financial security, as well as the comfort of feeling in control throughout the process.
“Between the paperwork, negotiations, securing a good rate and figuring out what the price of homeownership will actually cost them, today’s homebuyers are telling us that they are overwhelmed,” ServiceLink President, Organization Services Dave Steinmetz said in a press release.
The two greatest challenges to homeownership, as cited by prospective buyers, are high mortgage rates and high home prices, according to the report. These cost factors are causing many borrowers to settle for less desirable homes than they hoped to purchase.
“Many are being forced to compromise, stretching beyond their budgets yet still not getting everything they want in a home. Instead, they are craving ease, value, transparency and long-term reliability,” Steinmetz said. “Recognizing these needs can help lenders make meaningful shifts to streamline their processes to get them a competitive edge, meeting today’s buyers where they are.”
The report said the four main drivers behind homebuying decisions are simplicity, affordability, communication and stability. It also defined four of the most common psychological characteristics of modern homebuyers as stressed, time-strapped, inventive and digitally fluent.
Understanding these characteristics and how they factor into borrower expectations and priorities can be beneficial for loan officers and settlement service agents.
“In a process defined by stress and urgency, today’s buyers are craving simplicity,” the report stated. “Piles of paperwork written in terms they barely comprehend, coupled with a long list of fees they don’t fully understand, often leave them feeling overwhelmed.”
Among the most effective ways to ease these concerns is to provide clarity. According to the report, loan officers generally assume borrowers understand much less about certain elements of a mortgage transaction than they do. Such elements include taxes, Realtor fees and appraisal fees. What they need help with is understanding the contents of the vast amounts of paperwork they have to complete.
“Each document has its own set of vocabulary,” a Gen Z borrower said in the report. “I kept opening new tabs in the browser to look up those terms that seemed like ones from law school exams.”
Many borrowers indicated they valued frequent, transparent communication from the professionals they relied on to guide them through the process.
Negotiating a home price offer was rated as the most stressful part of the homebuying process by 19 percent of borrowers surveyed, while 15 percent said understanding all the paperwork was the most stressful part. About 12 percent said it was securing a good mortgage rate or the closing process and 10 percent said finding the right lender was the most stressful thing.
One “time-strapped” borrower characterized the process as feeling “high-stakes, fast-moving and uncertain, with pressure to make the right choice,” according to the report.
A Pennsylvania loan officer observed that customers often “want more time to make decisions” and complain about being unable to take their time with home purchases, per the report. As for the closing process, younger borrowers generally expected shorter closing times than older borrowers. About 35 percent indicated they expected the closing process to take two weeks or less while about 36 percent said they would expect it to take three or four weeks. Among the 19 percent who said they expected closing to take one or two weeks, most were in Generation Z.
A trend known as “co-buying” has emerged as a way some borrowers are becoming inventive in their approach to homebuying – particularly Millennials and Gen Z. This is where multiple borrowers will pool their money to finance a home purchase. The report said co-buying accounted for roughly 30 percent of home sales in 2025.
Fifty-three percent of borrowers surveyed indicated they would be willing to purchase a home at auction, with about two-thirds of Millennials and Gen Z indicating they would be open to the concept.
Upwards of 79 percent of borrowers who purchased a home within the past two years said they would consider refinancing in 2026 if market conditions were favorable, with Millennials and Gene Z again leading the way in this respect.
Nearly 30 percent of buyers surveyed for the report made compromises on their purchase decisions. These included agreeing to a higher monthly mortgage payment than they wanted, a higher mortgage rate than they wanted and/or putting more money down at closing than they wanted.
The most common thing borrowers said they wanted to find in a new home was more space. Approximately 34 percent said they wanted a larger home with more space in general. About 28 percent indicated they wanted additional yard space and more space between homes. The same percentage of borrowers indicated they wanted “Lots of storage space.” Approximately 90 percent of borrowers said they factored their pets’ needs into their homebuying decisions.
Space was also the number one home feature buyers compromised on as well. About 21 percent said they settled for a smaller yard than they wanted and the same percentage settled for homes with fewer bedrooms than desired. Roughly 15 percent settled for homes in worse neighborhoods and worse school districts than they wanted.
Loan officers indicated they believed many borrowers approached the housing market with unrealistic expectations. The top three examples include: expecting to find the “perfect” house below market value, underestimating the total cost of homeownership and expecting a lowball offer to be accepted.
Most borrowers and loan officers recognized the benefits of digital technology used in the mortgage process. The top six benefits cited by those surveyed were time savings, convenience/ease of use, flexibility, the ability to stay informed throughout the process, cost savings and transparency.
The report showed that nearly 90 percent of borrowers expect to be able to eSign some or all closing documents or self-schedule an appraisal. About 80 percent expect to be able to have a fully digital purchase experience, from origination to closing.
For more stories on this topic, visit our sister publicationThe Title Report's Housing Inventory & Attainability Watch library.