Home Buyer Confidence Strong in 2015

Home buyers are more confident now then they have been in the past several years, according to TD Bank's third annual Mortgage Service Index. The survey of over 1,450 consumers showed 30 percent of Americans consider now to be a very good time to buy a home. That’s 10 percent higher than measured in 2014. Almost 30 percent of consumers are expected to buy a home this year, higher than 21 percent in 2014.

The number of people buying homes in the U.S. has increased 5 percent within the last two years. Still, the survey found 2 in 5 American consumers feel there is a lack of inventory in their price range and 44 percent said they are not familiar with home affordability programs.

“The Mortgage Service Index found that only 28 percent of consumers are successfully using mortgage affordability programs, which demonstrates that a significant number of potential buyers may be missing the opportunity to purchase a home," Director of Retail Lending Sales and Production at TD Bank, Malcolm Hollensteiner, said in a press release.

While 86 percent of buyers felt they had sufficient information to educate themselves when buying a home, 51 percent of consumers felt banks could offer more relevant information online and 49 percent believe banks could provide better frontline training to equip loan officers to more clearly explain options.

“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,” Hollensteiner said. “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.”

First-time homebuyers have a particular desire for more educational resources. While these buyers feel banks could offer more financing seminars and workshops, more and more of them are looking for information online. About 58 percent of first-time homebuyers said they were looking for additional information online.

Many of these first-time buyers are from the Millennial generation. Half of Millennials surveyed said they are either very or extremely likely to purchase a home within the next year. However, Millennials continue to face more obstacles in buying homes than previous generations. Millenials surveyed lack of knowledge and confidence in understanding how to navigate the home financing process, mortgage rates, and non-mortgage debt as reasons that affected their home buying.

All in all, the home buying experience is improving. 68 percent of respondents said their most recent experience was excellent or very good, compared with 62 percent in 2014. These numbers were even higher among first-time homebuyers at 69 percent and buyers who purchased a newly constructed home at 81 percent.

“Nearly three-quarters of first-time home buyers applied for their mortgage in-person and just as many rate their experience as excellent or very good,” Hollensteiner said. “We continually see more positive home-buying 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.”