What buyers want most – research has made clear for more than a decade – is simplicity.

But what homebuyers get in today’s economic, environmental, and social backdrop is anything but.

Homebuilders and their partners meanwhile are awakening to a new reckoning. Customer experience – a Holy Grail that blends simplicity, transparency, and navigational confidence along the way in the journey – happens whether or not they invest in it, or commit to it.

In a dynamic and increasingly volatile landscape of U.S. residential development, homebuilders find themselves at the nexus of a pressing dilemma: The imperative to deliver a seamless customer experience for new homebuyers while simultaneously grappling with the complexities of surging prices, steep interest rates, and an influx of young, first-time buyers.

The recent acceleration of natural disasters, including wildfires, hurricanes, hail storms, flooding, drought, mudslides, and earthquakes, has further complicated the landscape for new homeowners. These events have heightened the risks associated with owning a home and plunged the home insurance industry into a state of reactiveness and disruption. The increasing frequency and severity of these natural hazards have led to reevaluating risk models and, in many cases, to higher insurance premiums for homeowners.

Young adult first-time buyers, already navigating the complexities of the current economic landscape, place a high value on transparency and simplicity in their purchasing journeys. For them, a smooth, straightforward path to homeownership is not just a preference but a necessity. Challenges posed by high housing costs and the potential for natural disaster-related disruptions add layers of complexity to their decision-making process. However, they also provide a clear directive for homebuilders and developers: to streamline the buying experience. By prioritizing clear communication, transparent pricing, and accessible information on financing and insurance, companies can better serve this vital demographic. Offering a seamless, hassle-free buying journey meets the expectations of younger buyers and sets the stage for long-term loyalty in an increasingly competitive market.

This paradox places builders in the precarious position of having to craft an idyllic journey through the home shopping and purchase process — an experience that is expected to be smooth, simple, and transparent — against a backdrop of escalating financial demands and a disrupted home insurance market reeling from the impacts of natural disasters.

From the stark reality of median home prices rising to $400,500 to monthly mortgage payments ballooning by 74% since 2021 — conditions that have not only stretched buyers' budgets but have also strained the very fabric of traditional home insurance solutions.

We want home insurance to be the easy part,” says Christi Burkhardt, Vice President, National Sales and Growth at Westwood Insurance Agency. “The Westwood model embeds home insurance early in the process to keep it as simple and streamlined as possible for buyers, allowing them to focus on all the other tasks associated with buying a home.”

This situation presents a unique opportunity for leaders in the homebuilding industry to engage proactively with the insurance sector. By integrating transparent, simple, and adaptable home insurance solutions early in the buying process, developers and builders can alleviate some of the anxieties faced by prospective buyers. Addressing insurance concerns upfront can help demystify one of the opaque aspects of home purchasing, making the overall experience more appealing, especially to younger buyers who may be less familiar with the intricacies of insurance.

In this sense, “upfront” means long before a prospective homebuyer visits a homebuilder’s website or steps into a model home or a new neighborhood. Rather, Westwood's advance work involves scouting every homesite in every one of their homebuilder partners’ new communities to match a diverse array of insurance carriers with potential home insurance solutions for future homebuyers.

With the rise of catastrophic event activity in today’s market, losses from hurricanes, tornadoes, hail, and wildfires are increasing for all carriers,” says Burkhardt. “We’re constantly evaluating our processes to help keep our carrier partners in a position to continue to serve all of our markets. This means that, while we look at rate, we also have to look at diversifying risk across carriers. At the same time, we’re trying to keep our process simple and easy for our customers.”

The education of the homebuyer becomes critical in this context. Builders and insurance partners like Westwood are now positioned to play an educational role, demystifying the nuances and guiding buyers to make informed decisions that suit their individual needs. This responsibility takes on added weight when considering the young adult market — Millennials and Gen Z — who may be less familiar with the intricacies of home ownership and insurance but are keen for clarity and honesty in their transactions. 

We may have a little more underwriting to do on new homes than we have in the past,” says Burkhardt. “By giving customers more information on alternative carriers, they can make a more educated decision.”

The evolving nature of natural disasters and market conditions means that this customer education process must balance a robust and positive customer experience with a practical, real-world, evidence-based assessment.

We're spending more time with customers going over the coverage differences,” notes Burkhardt. “In order to work out a premium that meets a customer’s need, there may be a bit more sharing of the risk.”

Homebuilders, in collaboration with insurance partners, must craft an experience that acknowledges and respects the financial and emotional gravity of purchasing a home in such an uncertain era while providing an accessible and dependable safety net. As the tides of change continue to swell, builders and their ecosystem of business and trade partners must embrace innovative solutions that address both the customer's quest for clarity and the mounting complications of the current economic and environmental climate.

Striking this delicate balance will not only define the future of homebuilding but also shape a new generation's dream of homeownership.