A Third of Recent Homebuyers Still Don't Shop Around for Mortgages
November 29, 2022
Consumer behavior to shop around and find the best mortgage terms has remained the same over the past eight years, according to Fannie Mae’s latest National Housing Survey (NHS).
Fannie Mae’s latest survey from Q1 2022 found that 36% of 2021 homebuyers received only one mortgage quote. This is consistent with survey findings from prior years, Q1 2014 and Q1 2019. Interestingly, first-time and repeat homebuyers do not show much difference in their mortgage shopping behavior. Approximately one third of both groups received only one quote across all years, Fannie Mae reported.
In Q1 2022, Fannie Mae found the top two reasons cited by recent homebuyers who only received one quote were the same top reasons cited in Q1 2019 and Q1 2014:
- Feeling most comfortable with the lender they received the quote from (39%)
- Satisfaction with the first quote they received (29%)
Title and Settlement Services
In Q1 2022, the survey found that 91% of homebuyers did not shop around for title and settlement services after receiving the Loan Estimate, despite the fact that title costs are listed as items you can shop for.
Instead, according to Fannie Mae, homebuyers typically followed what was recommended, perhaps an indication that they do not know how to shop for these services, or they find it easier to go along with what their lender or realtor recommends. Title companies, therefore, may experience very little competition from a cost perspective, particularly after they become a company that is frequently recommended by agents and lenders.
Mortgage Quote Comparisons
Of those who received multiple mortgage quotes, the quoted interest rate and monthly payment were the top mortgage-related items that homebuyers compared. Monthly payment was significantly more important to first-time homebuyers (the majority of whom tend to be younger and lower-income) compared to repeat homebuyers. Closing cost estimates were the third-most important cost item to compare among recent homebuyers.
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