Axios Event: Technology helps to put homeownership within reach, experts say

AUSTIN, Texas – Experts shared how they are using technology to build homes faster and help more people become homeowners at a March 9 roundtable discussion event at Axios House SXSW.

Why it matters: Housing is expensive and in short supply, making ownership seem out of reach for many. Attendees emphasized that improving education is the key to helping buyers understand what they can afford and owners cut down on costs.

Axios' Sami Sparber and Erica Pandey moderated the roundtable discussion event, which was sponsored by Lowe's.

Context: Many would-be homeowners aren't aware of the tools that can help them prepare to buy a home. There are also steps those in the real estate industry can take to make the market more affordable.

• Good financial habits – like saving for a down payment, steady income, low debt and a good credit history – are what banks are looking for when approving loans, the experts agreed.
• On the supply side of the equation, automation and more favorable zoning rules can help drive costs down and open up possibilities for hopeful homeowners.

What they're saying: "Two out of the three criteria for homeownership are effectively likely credit and your ability to make a down payment," said Kristian Lund, Self Financial's senior vice president of strategy.

• Self Financial is using technology to help people build habits that can eventually lead to homeownership, like saving and building credit. "So we built our technology really around enabling consumers to build their credit through some of their traditional payments. … We also have a forced mechanism called a credit builder loan, which allows builder savings," Lund said.

Improving access to tools that help renters and buyers is a key focus for Zillow, senior economist Orphe Divounguy said.

• "A couple of things we try to do to improve access is automatic rent reporting to the credit bureaus," Divounguy said. "Your on-time payments are reported, which is great. We know mortgage data tells us that most people get denied from mortgage due to high debt-to-income ratios and credit, and their lack of credit history, so we think rent reporting is definitely a way to get there."
• Zillow also created a tool called BuyAbility, in which users can input their finances to see what they can afford.

Improving the building process is also key to creating more affordable housing for buyers struggling with high costs, attendees said.

• Austin-based construction technology company ICON is working to solve this issue with their 3D-printed homes. The company can print a 2,000-square-foot structure in less than seven days, said Jared Kuhn, its vice president of real estate development and sales.
• "This is going to be a huge solution that we need," Kuhn said. "Automation is necessary given what's happening with labor, it's just drying up. … By leveraging technology to build homes, we can build them faster, cheaper and more resilient."

Yes, but: Attendees also emphasized the need to remove regulatory barriers and improve the permitting approval process to be able to build more housing in Austin more quickly.

• "The site plan process for the city of Austin for even building an apartment complex can be two years long," said Alina Carnahan, vice president of advocacy for the Real Estate Council of Austin.
• Austin is one of the first cities in the country to use AI as a first step in the development process, Carnahan said. "You can enter in, I'd like to build a back deck, here's my property, here's what it looks like right now, and the AI will run it through and say yeah that looks permissible, let's get you to a real person, or oh, that's way too big, let's start over."

What we're watching: Local leaders are trying to spread the word about Austin's permissive zoning, which is allowing more affordable housing to be built.

• "I think there's still an education gap in the buying populace," Realtor.com senior economist Joel Berner said. "Because when you talk to somebody about buying a brand new home, their first thought is, I can't afford a brand new home, that's crazy. But they can."
• "I think the more we can do is to say, 'Hey, you know, we have seen in the outskirts of town very permissive zoning regulations, we're seeing smaller, more affordable communities come up.' This is an option for a lot of first-time homebuyers, and I think a lot of them just don't know about it."