How Creative Financing and GenAI Are Changing the Homebuying Game

The real estate industry, like many others, is confronting structural challenges that require not only resilience but reinvention.

Today’s unavoidable macro landscape is characterized by uncertainty, rising interest rates and consumer hesitation. Consumers remain wary, loan officers are treading carefully, and traditional tools are proving insufficient in navigating today’s climate.

“The general sentiment is that people are just nervous,” Nick Friedman, president of homes at HomeLight, told PYMNTS. “They don’t know what’s going to happen next.”

That belief has bifurcated buyer behavior into two camps: those rushing to secure a home before conditions worsen and those delaying homeownership altogether.

“Some are thinking it’s worth getting into a home now and building equity earlier rather than later,” Friedman said. “The other side is saying, ‘I don’t even think I can afford it right now — and if I lose my job, I definitely can’t.’”

That sense of economic unease was the centerpiece of a survey that polled 109 top lenders across the United States, including names like CrossCountry, Fairway and The Loan Store. The data revealed that 63% of loan officers said the U.S. is headed toward a recession, a finding that has immediate implications for buyer psychology and lender strategy.

Amid the chaos, some firms are finding ways to turn adversity into advantage. Buyers, sellers, lenders and agents are recalibrating quickly, propelled by urgency, data and technology.

The Affordability Crunch

Today’s market challenges are structural and psychological. Rising mortgage rates have created a bottleneck in deal flow, with 47% of surveyed loan officers citing high interest rates as the biggest obstacle to closing transactions. Many buyers — particularly those who already own a home — find themselves trapped by high debt-to-income ratios and immobile equity.

“It’s very unlikely that you can afford both mortgage payments at once,” Friedman said. “And so, with [HomeLight’s] Buy Before You Sell, we allow you to remove that existing mortgage payment… [and] offer a 0% interest loan where we basically allow [clients] to take the money out of their existing house and go use it for a down payment on their new home.”

HomeLight’s Buy Before You Sell offering is one product in the marketplace designed for unlocking liquidity and eliminating friction in a process that has traditionally been rigid and risk-averse. At its core, the tool helps clients sidestep the chicken-and-egg problem of needing to sell their home before they can afford their next one. It’s particularly relevant now, as home equity remains at all-time highs even while transaction volume has stalled.

“Home prices have gone up, they have appreciated, they haven’t tanked,” Friedman said. “That’s where a lot of consumer wealth is today.”

Beyond HomeLight’s proprietary products, Friedman pointed to broader trends in creative financing that are helping to prop up demand in a cooling market.

“There’s a very significant percentage of people who are actually using the rate buy downs,” he said, referencing tactics like 2-1 or 3-2-1 mortgage buy downs that reduce payments temporarily to help borrowers qualify. “[And] there’s been a massive increase in the amount of seller concessions that are happening.”

These concessions are especially strategic because sellers are often buyers themselves and understand the challenges of today’s lending environment, he said.

“Every single deal is like a puzzle,” Friedman said. “It used to be that puzzle was one piece or two pieces … now it’s a lot more complicated. But there’s still a way to do the deal.”

The AI-Backed Evolution

If innovation in lending structures is one pillar of the real estate industry’s modernization strategy, the other is its embrace of digital tools and particularly artificial intelligence. While real estate has lagged behind sectors in digitization, the pressure to adapt is mounting.

For example, rather than waiting six days for an underwriter to confirm eligibility, automated systems can now surface viable options in near real time.

“I think many agents and loan officers get a little bit scared about the topic… I don’t believe [AI will replace them] at all,” Friedman said. “When people are buying a house, they want to talk to somebody about it.”

Instead, AI is most likely to serve as an efficiency layer, not a replacement for human expertise. Real estate is a collaborative undertaking involving agents, loan officers and tech-driven third parties.

“Imagine a client submits an application and they say, ‘Hey, I recommend you do a 2-1 buy down… buy before you sell… this makes the most sense for you financially,’” Friedman said. “That’s the kind of technology innovation I think is where the industry’s going.”

Asked to put on his “futurist hat,” Friedman outlined a vision of a more integrated, consumer-centric housing ecosystem — one in which FinTech, real estate services and digital platforms converge.

“We’ve kind of seen that mini convergence already start to happen, at least in our business,” he said, referencing HomeLight’s partnerships with lenders and agents nationwide.

He said what excites him most, however, is not just the technology itself — but what it can unlock in terms of access and empowerment.

“There’s trillions of dollars in home equity,” Friedman said. “It’s at an all-time high right now. And it’s where most of client wealth is. Products around equity, I think, are really important.”

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