Why first-time buyers don’t trust the system

HousingWire

This week on Power House, Clayton Collins sits down with Kristin Messerli to unpack one of the most persistent challenges in housing: why first-time homebuyers feel overwhelmed, underprepared, and increasingly distrustful of the financial system.   They explore the role of education in bridging the knowledge and trust gap, emphasizing the importance of empowering loan officers to build relationships within their communities. The discussion also highlights the impact of the ambassador program and the goals for 2026, focusing on sustainability and advocacy in the housing market.   Here's a glimpse of what you'll learn:   Why first-time buyers often feel overwhelmed and uncertain   How trust in lenders has declined over time   Why education is the foundation of buyer confidence   What loan officers need to become effective educators   How ambassador programs strengthen community relationships   Why financial literacy is missing from traditional education systems   How personal stories help buyers see themselves as homeowners   The sustainability challenges facing housing nonprofits   Why advocacy matters for loan officers and their clients   What the future of homeownership depends on   FirstHome IQ  https://www.firsthomeiq.com/  Kristin Messerli  https://www.kristinmesserli.com/about   The Power House podcast brings the biggest names in housing to answer hard-hitting questions about industry trends, operational and growth strategy, and leadership. Join HousingWire president Diego Sanchez every Thursday morning for candid conversations with industry leaders to learn how they’re differentiating themselves from the competition. Hosted and produced by the HousingWire Content Studio.

Transcript

00:00dear friends when someone stands at the threshold of buying their first home

00:11they're navigating one of the most significant financial crossroads of their lives

00:15one that will shape the their ability to build wealth for generations the challenge is that

00:21most people arrive at this moment unprepared trust in financial institutions remains low

00:26and the sheer volume of information creates paralysis rather than clarity young consumers

00:31delay critical decisions not because they lack ambition but because they lack confidence in

00:37knowing what to do next mortgage professionals sit at the center of one of the most important

00:42learning and growth moments in a person's financial life this is an excerpt from a letter by kristin

00:49messerly the executive director of first home iq in the 2025 impact report i'm thrilled to welcome

00:56kristin to the powerhouse episode today to talk about the impact report and first home iq and what

01:01she's seeing in first-time home ownership trends in 2025 and beyond kristin thank you for writing

01:08this impactful letter but more importantly thanks for the impact you're having on first-time home

01:13buyers welcome to powerhouse thank you so much for having me and for sharing the impact report

01:17really appreciate it kristin you've been uh on powerhouse before and on a lot of housing wire

01:23podcasts and and um and written op-eds and talked a lot about first-time home ownership so i think

01:29it's incredibly uh powerful and um it's a great opportunity for us to be able to continue this

01:35conversation and talk about exactly what you saw through first home iq in 2025 and what you're

01:40planning for in 2026 but for the listeners who have not interacted with you before or aren't familiar

01:46with first home iq give us a glimpse into what brought you into this organization and what you're

01:51you're seeking to do as you lead this non-profit into the future so i i started my career as a

01:59social worker and did a lot of education um with younger populations um that brought me into working

02:05with lenders for many years and helping them reach the next generation i did a lot of research i've

02:10surveyed over 9 000 millennial and gen z at this point um and you know it came to a certain point i was

02:17talking with dave savage about how we could come together as an industry to solve for the financial

02:22literacy crisis and that has been the mission of first home iq um it really is about everyone

02:28taking ownership over how they can be a community leader through education and building trust um so

02:35i'm really excited about where we are today i feel like we have laid some really awesome groundwork

02:39together and you as a board member we built our board last year and um we have a lot of awesome

02:44things to come has the vision or or tactics that you're taking with first home iq changed since that

02:51initial vision conversation you had with dave it's definitely evolved um i i feel like last year we tried

02:59a lot of different things last year was our second year in operation and um we have you know very

03:05stable ambassador program where loan officers are participating in a program to help them be

03:10community leaders and lead with education build trust um but we were also going direct to consumer

03:15and going direct to schools and we're doing a little bit of that but it's mostly through the

03:20loan officer so that's kind of what where we got a lot of clarity of like okay we can create a ton of

03:26impact if we are equipping the loan officer or even the realtor but people who are are already they

03:32have business objectives to do that so we're just providing them with the resources to be better

03:37community leaders yeah it really aligns mission and business outcomes in a singular organization

03:44so in the report you you talked a lot about the the trust and knowledge crisis give us a glimpse into

03:51what conversations interactions or data drove that conclusion and then what a trust and knowledge crisis

03:58means yeah so i noticed this in a lot of conversations with people of this lack of trust and um and just

04:04kind of like indecision and feeling of overwhelm um but then i i realized we're seeing this over and over

04:13in the we do an annual next gen home buyer report i've started those in 2020 um i do at least one report

04:20but usually another throughout the year and um and we're seeing trust decline year over year and so

04:27by the time in 2025 it dropped to just 20 saying that they trust loan officers to help them make

04:33smart decisions about their mortgage um but it's not surprising i think when you look at the bigger

04:38picture of like declining trust overall it's not just in our industry although that is a a big you know

04:45issue in our industry but it's it's everywhere we're we're seeing declining trust and across all

04:50different industries from healthcare and media technology um so it's kind of like the state of the world

04:56but also it does create a real real impact when it comes to someone making a decision to buy a home

05:03if they have not received the education themselves which no one has you know no one got financial

05:08literacy education it's certainly not home ownership education in school and then they are also so they

05:13don't have the confidence they're feeling overwhelmed by the amount of information available to them and then

05:19they don't trust someone to guide them through that process they're of course going to pull back and not

05:25actually go through with with that decision for them a lot of times i'll read some of the stats from

05:32the report so the knowledge gap you quantified as 93 percent of millennials and gen z did not learn

05:38financial literacy in school only seven percent could correctly identify the minimum down payment

05:45required to buy a home and over 50 are overwhelmed by financial information so those are the knowledge gap

05:51stats the trust gap only 20 trust lenders and realtors to help them make smart home buying decisions

05:58only half of housing professionals trust the industry to serve the first time home buyer well

06:03that's that's a shocking one we don't even trust ourselves number 50 of consumers delay major financial

06:08decisions due to overwhelm and uncertainty those are all pretty staggering numbers a few of them really

06:15stand out as something we can do something about specifically that only seven percent correctly

06:21identify the minimum can correctly identify the minimum down payment required how does first home iq fit

06:27in solving some of these issues and like moving the metric on these on this research yeah so it's all about

06:35helping the loan officer build the relationships in their community and do it with education so you can't just

06:42put knowledge out i mean you can't just say you know here's the information because people have the

06:47information you need to do that while building trust and relationships so we have you know tools we have

06:54quizzes presentation materials but we also have playbooks and scripting and ways that you can build

07:00partnerships with whether it be with your local schools or a local you know gym library wherever you are to

07:08build those relationships and then be able to deliver that education it needs to go hand in hand how do

07:13you think the way that first-time home buyers or consumers period um the way they consume information

07:19is changing with the world kind of turning toward chat gpt and ai resources that it's replacing search in

07:26many circumstances do you think the way that um you know consumers are seeking out uh financial literacy

07:34information is is changing at all are they are they more likely to go digital before they speak to

07:38that loan officer or or realtor or like how do you see that order of operations evolving oh for sure i

07:45mean they absolutely are going to talk to chat gpt before they're going to talk to a person um they want

07:51to build their own confidence before they're going to someone who's potentially going to sell them

07:56so i think that's where where if you can get in front of them you know not saying like don't you

08:03know let them go to chat gpt let them have those conversations encourage that even so that they can

08:08build that confidence but i think as long as as much as you can get in front of them and build the

08:13relationship you're also going to become someone who they can then talk through those things and then

08:19if you add in scenario building and helping them actually understand oh if i you know here's some

08:25creative financing strategies or ways that you can get into home ownership um and having those

08:31conversations that really goes a long way so when you talk about your 2025 impact there's many

08:37points where you emphasize that this is an advice problem not a not a product problem so if the problem

08:44is advice and we want to talk about 2025 impact how are you helping originators provide better advice

08:50so i think part of that is uh we have a first home iq quiz that is a validated instrument

08:55for helping people understand how like knowledge about buying a home um and i think leading with

09:01that we give every ambassador their own quiz link so that it's kind of a lead magnet they get the

09:06information from the person that took the quiz uh but it's also a conversation starter and uh to me

09:11that's a really big part of this it's it's giving um supporting people with the general education like

09:18that of like okay just give people the language and to actually have a conversation around this and start

09:24something and then from there it's supporting tools like mortgage coach and you know things that allow

09:30them to to build scenarios um but i also think you know within our presentations that we have loan

09:37officers and ambassadors have access to uh we talk about like we story build you know we give people

09:44input of like okay on this on this slide you should talk about um in rent versus owning in this way and

09:51share stories around it um because i think that people again are just overwhelmed with the information

09:57they need to see that personalized um whether it be on social media or in a first-time homebuyer

10:02workshop i think the personalization is incredibly important to to changing psychology and and confidence

10:08i mean like one of the the things that keeps first-time homebuyers or any repeat buyer on the sideline or

10:15or um you know stuck in a house they don't love anymore is their confidence in their ability to

10:19transact their confidence and affordability their confidence that the right mortgage product right

10:23rate exists for them and being able to um you'll see people that resemble you resemble your financial

10:32situation in your in your community um have successful housing outcomes is an incredibly important um

10:41you know example and and and uh real life evidence that that you can also go like achieve this outcome

10:49so like being able to paint the picture of successful first-time homebuyer outcomes and having

10:53originators and realtors who can you know talk about their experiences with other first-time buyers i

10:58think is an incredibly important part of us making sure the industry sets the correct narrative and in

11:06what's possible in home ownership today yeah i really think i mean i hear stories all the time about how

11:12people it didn't click for them until they saw someone that it that they felt connected with you

11:19know like it was like oh if that that person is a lot like me i now can imagine myself in that same

11:25scenario and it might not even be you know someone might be talking about a co-buying thing and and they

11:30might not be you know actually go through that process but um to be able to see different stories of

11:37success and um that and i think running through those scenarios that's a way of education that

11:44really connects with people all right so talking about scenarios of success like another like page

11:49that jumped out in the report are the the um the top donors but that's quantified and that's big

11:56possible by bringing students into to first home iq so tell us about that process for your ambassadors

12:03like how are they bringing students in and like and what business outcomes does that help drive for

12:08them yeah so we realized um people fall into these different buckets within the program not everyone

12:15is doing everything but we have probably 20 of our ambassadors are going directly to schools and

12:21volunteering in their local schools um and delivering education or doing q a type of thing um public

12:30libraries that type of stuff and then we have a portion of our ambassadors who are just going to

12:35realtor groups primarily and talking about how they can build trust and lead with education so i mean

12:41exponential impact that way um that one is a lot harder for us to quantify but um but it's uh definitely

12:48you know having that's a really great way that people can have impact and be building their their business

12:54outcomes do those two types of ambassadors have different personal objectives like like going to

13:00to spread the message in schools versus going to real estate brokerages and talking at a monday morning

13:05meeting i think everyone is is wanting to build their business absolutely but if you're going into a

13:11school you have a passion for it i mean people are wanting to volunteer give back in some way however

13:17we do hear constant success stories of people getting a loan from a teacher or a parent and you know so

13:23it i think it if you put like follow your purpose and your passion you are going to get business out of

13:30that too so if anything it fuels you in other aspects of your business um yeah so so then we have

13:37people that are just focused on webinars and first time home buyer workshops um and i think those are

13:42probably the top three areas that people are really engaged um otherwise it's delivering social media

13:48education as well yeah okay so like kind of on this tune but like i just want to throw a different

13:55question at you so as executive director what's been the biggest challenge you've faced this year and

14:01like you know one that potentially the listeners of powerhouse or the industry could help get behind

14:05and help get you past i love that question that's a tough question i know i'll give you a second but

14:09like i mean i i think powerhouse is supposed to be executive to executive conversations okay yes

14:14i love it you gotta talk through challenges so it actually um for me the biggest challenge recently

14:20was around looking at how we deliver to all of these different types of ambassadors um and and then

14:29and then getting to sustainability i mean 20 of our our revenue right now is just from personal

14:34donations and we're so grateful for people who are helping us continue on this mission

14:40um but the way that we can get to sustainability would be to promote the ambassador program and i

14:45think in after you know the last couple of months going through building this impact report we did a lot

14:50of impact research and really narrowed in like clarified where we have the most impact with the ambassador

14:57program so i think we're on the right path there we have you know 80 we have 160 ambassadors 80 who are

15:05really active in their communities um 144 city cities represented so if we have executives who are willing

15:12to share this program with their companies um that would uh we we really need probably 30 more ambassadors

15:19just to get to like this is this is where we need to be okay 30 is not a high bar that feels like one

15:26that um that we can clear uh when you quantify your your ambitions for 2026 is part of that a an

15:35ambassador goal or like how are you setting goals for yourself and the the organization for next year

15:39yeah so we as part of that clarity around the program uh we've built out really awesome programming

15:46for the year we have first home iq faculty um so people who are really engaged top producers who are

15:52doing this really well who are supporting the ambassador program um so that's one of our goals

15:57is just continuing to improve that that programming another is that some people are just not ready to

16:03be full on i'm an ambassador but they do want to participate and so we're developing a certification program

16:11where we're providing the education and around how to build trust how to lead with education um and people

16:18can go through that certification for for just like a smaller you know stepping stone into the ambassador program

16:25so we'll be launching that in may publicly april with our ambassadors um so that's a big part of it

16:32and then the last part is advocacy we want to support and and help loan officers really take a more active role

16:39around not just um you know leading with education and building trust but also talking about um how to to lead

16:46with advocacy and and advocate for the you know what they need in on a local level at a national level

16:54yeah that's really interesting and i i think and i can advocate that people look into being a first

16:58time iq ambassador as we we just dropped our 2026 housing market forecast and um there's some some

17:06parts that are that are really notable but like the the like the part that really stands out to me is

17:11like we've kind of hit a normalization in the market and a stabilization we're forecasting about 237

17:18000 um more existing home sales in 2026 and 2025 that that's not a lot we're talking about low

17:25single digit growth and um our our forecast also anticipates nationally and you know this isn't for

17:32local markets but a um a a small uh home value decline in in 2026 less than one percent but like

17:39we're not seeing home price growth next year um one of the things that's kept first-time buyers on the

17:45sideline is rapid home price growth so stabilization and in prices actually can be a really positive

17:52market for first-time first-time home buyers who have been on the sideline so when we look at a

17:58market where we don't expect a lot of unit volume growth and prices are stabilizing originators that

18:05are ambitious and want to grow their volume over last year are going to have to win market share and

18:10and have to look to places they didn't look last year and i think this can be this can be an important

18:14one yeah absolutely i think that's exactly the the conversation that you know if loan officers are

18:21really going to win market share they need to be focused on ways that they can build relationship and

18:27um and you know build trust and and lead with education all right so talking about building trust

18:32and leading with education i know you have a long queue of of projects and resources that are dropping

18:39in 2026 you want to walk us through some of the work that's you know led up to the what you're

18:44dropping in 2026 and what members of the community and ambassadors can anticipate yeah so last year we

18:52translated all of our materials into spanish but we're going to continue that that process and translate

18:57our quiz um we will be this year we have awesome programming in our mastermind classes that are open to

19:04anyone so definitely join those that's the second wednesday of every month next week we'll we'll be

19:10and i don't know when this is you know publishing but we'll have creative financing strategies so um

19:15check our youtube channel for all of that and then um our certification will drop like i said in may

19:22um and going back backwards a little bit we'll be doing the um participating in the national advocacy

19:28conference with the mba in april um and really excited to get 50 loan officers across the country

19:35who are going to be leading that being there um with us on the hill so and we'll do a first home

19:41iq event there and then um and then we're also updating our first home iq home buyer education courses

19:49um that every ambassador has access to and we have that publicly available um so lots of good stuff

19:55coming this year that's awesome um and uh any of those that you're most excited about or that's

20:02getting most of your energy um i'm actually just really excited about our ambassador program i feel

20:08like we've gotten so much clarity around what's impactful and um so that's what i'm most excited

20:14about but the certification is going to be a really big deal too and so um dave and i have been working

20:20a lot on you know what that looks like and um i think the the mba is supporting that and i think

20:26we're going to get a really good um a lot of impact from that that's awesome to hear you're working with

20:30the mba on that how's has there been a partnership there what's that relationship looked like yeah yeah

20:35so um definitely we'll be partnering on um when we launch the certification but we're also partnering

20:41with them on the advocacy conference and just makes sense where we're after you know similar goals of

20:47bringing together the industry to solve for this so i think um yeah that partnership's been awesome but

20:54really our goal with the non-profit is that we are coming together as an industry and um so any

21:00it's it's been really fun to see different partnerships housing wire being one um you know

21:05just ways that we can continue to promote this all together yeah all right kristen well thank you so

21:11much for sharing your expertise today and coming on powerhouse i want to make sure we get in the show notes

21:16um links to the 2025 impact report as well as the first time is the first time homebuyer report the

21:22other the larger one yes and we will be launching that in march i didn't miss that from the okay a lot

21:28of everything we'll link the last year's report and make sure we get that one updated um when uh when

21:34it when it drops in in march but uh kristen couldn't be more excited about the support you're bringing to

21:39the industry uh originators and and the consumers that benefit from the education and knowledge um i think you

21:45shine a really important light on the the knowledge and education gap and i'm excited to see the advice

21:50that you bring forward in 2026. great thank you so much for having me

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