We are betting this is one stat that is bound to change, if it has not already amid the big jump in interest rates.
A new Fannie Mae survey finds that more than a third of home buyers weren’t shopping around for mortgages as recently as the first few months of 2022.
In fact, 36 percent of home buyers got just a single mortgage quote. No one-time blip, previous Fannie Mae surveys from the start of 2019 and 2014 found similar numbers of buyers who opted not to shop around for a better mortgage deal.
And it didn’t matter whether the buyers were first-timers or buying their second or third house – roughly a third in both categories were OK with seeing just a single offer and taking it.
Is this reluctance to comparison shop simply a factor of the now bygone era of rock bottom interest rates, when historically great deals were to be had without too much effort?
Have Prospective Borrowers Become Complacent?
A piece by a pair of Fannie Mae executives explaining the survey doesn’t go there. But the results do suggest a degree of complacency on part of buyers, at least back when rates were super low.
The two top reasons buyers cited for not getting quotes from other mortgage companies and banks certainly point in that direction.
Roughly 40 percent said they were “feeling most comfortable with the lender they received the quote from,” while 29 percent cited “satisfaction with the first quote they received,” write John Thibaudeau, vice president for single-family real estate asset management at Fannie Mae, and Rachel Zimmerman, market research advisor and National Housing Survey lead.
“Feeling comfortable with a lender or “satisfied” with the first mortgage quote could be interpreted as taking the “easy” path since it requires less time investment and critical thinking during a process that many people already find complex and stressful,” the Fannie Mae executives note.
Meanwhile, the number of home buyers attempting to negotiate mortgage-related costs was also on the decline as we entered 2022.
Just 33 percent of buyers surveyed by Fannie Mae in the first quarter of 2022 attempted to bargain down the mortgage rate. That’s a pretty big drop from the first quarter of 2019 when 40 percent attempted to negotiate.
As far as discount points, appraisal fees, and mortgage insurance go, just 15 percent of buyers surveyed earlier in 2022 attempted to push their lenders to lower the cost of these items.
Again, as with mortgage rates, we wouldn’t be surprised if the next Fannie Mae survey of home buyers finds some very different results given what has happened with rates.
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