Noticed an influx of clients thinking about buying a home? You’re not alone; buyer confidence is on the rise, according to a recent survey by TD Mortgage Bank.
The third annual TD Bank Mortgage Service Index, released today, asked a national group of 1,450 consumers who purchased homes in the last 10 years about their homebuying experiences and behaviors. Polled between Jan. 26 and Feb. 2, 30 percent of respondents said they consider now to be a very good time to purchase a home, compared with just 20 percent in 2014. Twenty-nine percent of participants said they are likely to purchase a home this year, compared to 21 percent in 2014.
Most confident are millennial buyers, who indicated they are either “very likely” or “extremely likely” to purchase a home within the next year. More than one-third of respondents agreed that now is a good time to buy, and because they are more aggressive with their financial goals than older generations, 64 percent said they think their chance of getting approved for a mortgage is “excellent” or “very good.”
The Mortgage Service Index also found that the homebuying experience is improving, with 68 percent of respondents rating their most recent experience as “excellent” or “very good,” compared with 62 percent in 2014. These numbers were even higher among first-time homebuyers (69 percent) and buyers who purchased a newly constructed home (81 percent).
But the index results were not all positive. The survey found that while the number of consumers who have purchased homes within the past two years has increased by 5 percent since 2014, Americans still face obstacles in the homebuying process. According to the index, two in five consumers feel there is a lack of inventory in their price range, and 44 percent are not familiar with home affordability programs.
While 86 percent of buyers said they have sufficient resources to educate themselves about the process, 51 percent of respondents believe banks could offer more relevant, helpful information online, and 49 percent believe banks could provide better frontline training to equip loan officers to more clearly explain options, according to the survey.
“In our current housing market, a critical first step for buyers is to educate themselves on the financing process by speaking with multiple lenders and learning about the loan options available to them,” says Malcolm Hollensteiner, director of retail lending sales and production at TD Bank. “Lenders today should be working with borrowers on a case-by-case basis in order to find the loan option that best meets their needs and budget.”
The index also found that 45 percent of buyers seek information on home financing through one-on-one meetings with Realtors and lenders, but the use of digital resources is on the rise, particularly among younger buyers who said they obtained information from bank websites, comparison shopping or expert websites and social media.
“Nearly three-quarters of first-time homebuyers applied for their mortgage in person, and just as many rate their experience as ‘excellent’ or ‘very good,’” says Hollensteiner. “We continually see more positive homebuying experiences among borrowers who engage in face-to-face interactions with lenders. This is also true for those who obtain a mortgage with a financial institution committed to guiding them through the process and maintaining an open, effective relationship with them and their Realtor.”
The survey was hosted by global research company Vision Critical.