While many buyers prefer "shopping around" with different lenders for the best possible mortgage terms, a Fannie Mae National Housing survey found that, for one-third of shoppers, that’s not the case.
The survey, which analyzed data from the first quarter of 2022, consisted of 662 first-time buyers and 543 homebuyers who purchased homes in 2021.
According to the survey, 36% of 2021 homebuyers received just one mortgage quote. Notably, Fannie Mae said first-time and repeat homebuyers did not show much difference in their mortgage shopping behavior; approximately one-third of both groups received only one quote across all years.
Buyers who received only one quote cited two reasons for their decision: 39% reported they felt most comfortable with the lender they received the quote from, and 29% reported they were satisfied with the quote they received.
Fannie Mae’s survey said first-time buyers may seek out only one quote due to the myriad components that make up mortgage costs, including the interest rate, closing costs, and points across different mortgage offers.
However, one-third of repeat, more experienced buyers also reported getting only one mortgage quote, despite being more familiar with the purchase process, which could indicate that a trusted relationship with a lender sealed the deal.
Negotiations also declined in the survey, with Fannie Mae finding that only 33% of recent homebuyers tried to negotiate the mortgage rate, compared to 40% in the first quarter of 2019.
Discount points, mortgage insurance, and appraisal fees were the next top areas that homebuyers tried to negotiate, although to a lesser degree than mortgage rate — less than 15% of homebuyers tried to negotiate each of these items in the most recent survey.
Education, however, may play a role in mortgage negotiation. There was an almost 20-percentage-point difference between those homebuyers with a high school education shopping for multiple mortgage quotes (47%) compared to those with a college/grad school education (66%).
Income levels also played a role. A significantly higher percentage of recent homebuyers with higher incomes obtained two or more quotes in 2022, compared to those with lower incomes.
More details from the survey can be found here.
