1/3 of Consumers Do Not Shop Mortgage Rates
Consumers can be picky when it comes to every day shopping, often times buying something online or from a different store just to save a few dollars. But when it comes to comparing and shopping for mortgage rates, consumers appear to be less picky.
According to a new Fannie Mae survey, around a third of homeowners are not taking the time to look around for the best mortgage loans on the market.
In the first quarter of 2019, only 28% of buyers measured three mortgage quotes, Fannie Mae’s survey said. And the numbers drop dramatically for those who compared four loans (7%) and five loans (2%).
The report’s data reinforced Fannie Mae’s prior findings, which showed that many consumers “lack knowledge about mortgage basics.” A 2018 survey revealed that many consumers overestimated the minimum credit score and down payment needed to qualify for a mortgage.
According to Fannie Mae, two thirds of home-buyers sought multiple mortgage quotes in the first quarter. Breaking down those numbers showed how rate-shopping helped a significant portion of consumers to get more favorable outcomes.
Of that number, 47% of homeowners were able to negotiate their interest rates—and 36% were successful in that regard. Mortgage loan searchers also found success in negotiating discount points, with 20% engaging in negotiations while 13% successful.
What Happened to Rates Last Week?
|Mortgage backed securities (FNMA 3.500 MBS) gained just +47 basis points (BPS) from last Friday’s close which caused fixed mortgage rates to move lower from the prior week and hit their lowest levels of the year.|
Overview: The shock of the proposed tariffs on China (the remaining $300B that are not already taxed would now be taxed at 10% effective September 1) put upward pressure on MBS for some great pricing. The Fed also cut their key interest rate but that little to no impact on mortgage rates.
The Talking Fed: The much awaited Fed action finally happened. You can read their official policy statement here.
Here is a summary:
Jobs, Jobs, Jobs: Big Jobs Friday! You can read the official BLS report here.
What to Watch Out For This Week:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.