Americans Are Growing Less Confident They Can Afford a Home

MeridianLink, Inc. announced the results of a nationwide survey of more than 1,000 Americans about consumer behavior and expectations during the mortgage lending process.

The survey found that a third (31%) of Americans are less confident in their ability to afford a home today compared to five years ago, and a majority of consumers (55%) expect mortgage rates to continue rising through the end of 2023.

Lack of knowledge may be a factor too, as a fifth of Americans (22%) reported not understanding the mortgage process at all.

Key Findings:

• Both first-time homebuyers and those with experience purchasing a home face daunting challenges when it comes to getting a mortgage. They are subject to rapidly fluctuating mortgage rates in addition to the scrutiny of the lender they choose. In 2023, this can make the lending process complicated.
• The survey found that nearly one-third (31%) of Americans are less confident in their ability to afford a home today than they were five years ago. Some of this is driven by today’s elevated rates, which more than half (55%) of consumers expect will continue rising through the end of the year.
• But rates are just one part of the story. Navigating the often-burdensome mortgage application process plays a role as well. According to our findings, more than one in five (22%) Americans said they do not understand the mortgage process. Four in ten (41%) said their primary financial institution offered no mortgage lending support at all.
• Almost half (45%) of Americans shop for other options before getting a mortgage through their primary FI. The key drivers for selecting a mortgage lender include low closing costs and comparatively better rates (53%), positive brand reputation (40%), and flexible repayment options (36%).

“These findings demonstrate why financial institutions need to be better equipped with the right tools to support their consumers during major financial milestones like buying a home,” said JP Kelly, SVP of Mortgage at MeridianLink. “We are proud to provide credit unions and banks with a platform that allows them to offer personalized mortgage support, facilitate a convenient lending process, and reach more potential consumers during that initial shopping phase.”

Based on the insights from this study and the Company’s work with over 2,000 financial institutions, MeridianLink provides the following tips to lenders who are looking for ways to grow their mortgage business:

• Make the mortgage lending process as easy to understand and convenient as possible. With so many consumers willing to shop around, creating an end-to-end experience with as little friction as possible will be critical to consumer retention. MeridianLink Mortgage—the mortgage loan origination component of the Company's multi-product platform MeridianLink One—is an excellent way to create and manage that seamless process.
• Be proactive about providing consumers with offers and support that are tailored to their individual needs, or risk losing them to an institution that does. MeridianLink Engage, the Company’s marketing automation solution, is a powerful tool that can assist credit unions and banks in making this consumer outreach as efficient and effective as possible.

To download the full report, including more data, charts, and methodology, detailed survey findings, please click here.