Housing Finance Market Expected to Reach $33,298.79 Billion by 2031

According to a new report published by Allied Market Research, titled, “Housing Finance Market," The housing finance market size was valued at $4,520.67 billion in 2021, and is estimated to reach $33,298.79 billion by 2031, growing at a CAGR of 22.3% from 2022 to 2031.

Housing finance is a type of loan provided by banks or other financial institutions that help borrowers purchase home, land, office, or any other type of real estate property. In addition, house finance are rising in popularity among individuals and businesses for purchasing real estate properties by doing small down payments, which drives growth of the market. Furthermore, key factors that drive the market include growth in need to streamline housing finance services and increase in need for finance among businesses and individuals to purchase real estate. In addition, flexible period to repay the finance amount positively impacts growth of the market. However, factors such as enforcement of strong rules by banks and financial institutions for providing finance services is expected to hamper the housing finance market growth. On the contrary, rise in prices of real estate properties in developing countries and penetration of metropolitan cities across the globe are expected to offer remunerative opportunities for expansion of the market during the forecast period.

Furthermore, major companies are launching their schemes to offer housing finance to customers. For instance, Citi bank has established affordable housing preservation program. The program will acquire multifamily housing primarily for the benefit of low to moderate income individuals and communities including workforce, regulated and mixed-income housing with a commitment to community development and engaging diverse professionals throughout the acquisition and ownership infrastructures.

On the basis of provider, the banks segment is the highest growing segment. This is attributed to the growth in focus on digitalization of financial processes has transformed traditional banking systems, owing to which various banks are providing housing finance to significantly support rise in consumer needs. In addition, growth in digitization across the banking sector has filled existing gaps in financial services and increased efficiency among the banking sector to provide better customer experience, which drives the housing finance market growth.

Based on region, North America attained the highest growth in 2021. This is attributed to the increase in adoption of digital lending platforms among banking and financial services for improving financing services is considered as an important factor for growth of the housing finance market trends in this segment. In addition, rise in adoption of advance technologies such as e-signatures, artificial intelligence (AI), machine learning, and advanced analytics among house financing service companies for identifying fraudulent activities in lending service propels growth of the market in North America.    

The COVID-19 pandemic had a negative impact on the market attributing to the fact that consumers that planned on purchasing new homes had to postpone their plans due to closure of business and fall in their income. Therefore, the pandemic negatively impacted the housing finance market growth.

Key findings of the study

• By application, the home purchase segment led the housing finance market share in terms of revenue in 2021.
• By region, North America generated the highest revenue in 2021.

The key players profiled in the housing finance market analysis are Bank of America Corporation, Charles Schwab & Co., Citigroup, Inc., CREDIT SUISSE GROUP AG, Dewan Housing Finance Corporation Ltd., Goldman Sachs, HSBC Group, JPMorgan Chase & Co., LIC Housing Finance Ltd., Lloyd's Banking Group, Morgan Stanley, Royal Bank of Canada, Royal Bank of Scotland plc, UBS, Wells Fargo, Divvy Homes, Inc., and Pronto Housing. These players have adopted various strategies to increase their market penetration and strengthen their position in the housing finance industry.