Category Archives: nerdwallet

Homebuying, mortgage process stressful for many consumers

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Forty-two percent of homebuyers reported that the homebuying process was stressful, according to NerdWallet’s Home Buyer Reality Report.

Nearly one-third said it was complicated, while 21 percent reported it was intimidating. However, 30 percent described the experience as rewarding, while 41 percent it was manageable. Yet, 49 percent reported they would do something differently if they were homebuying again.

Mortgage applications are still confusing many homebuyers, as 58 percent of homebuyers applied for one. Forty-one percent of homebuyers who did apply said they were not sure of all the options available to them. And 28 percent said they did not feel like a priority to their mortgage professional during the loan process. Overall, 89 percent of applicants were approved for a loan to buy their house.

Among generations, 27 percent of millennials believed their mortgage rate was affordable when they purchased, and 39 percent said the mortgage process was positive. Eighty-nine percent of millennials who applied were approved. However, 11 percent of millennials said that after purchasing their home, they didn’t feel financially secure anymore. More than half (57 percent) said they had regrets in their homebuying experience.

Only a quarter of Generation X members reported a positive experience with the mortgage process, but 91 percent of Gen Xers were approved for one. Twelve percent reported not feeling financially secure after homebuying. Sixty-one percent reported that they would do something differently when homebuying again.

As for baby boomers, 25 percent found the mortgage process stressful, but 42 percent said it was manageable. Sixty-five percent said they believed they were aware of all their options for mortgages during the process. Only 6 percent said they did not feel financially secure after they bought their house, but 38 percent of baby boomers would act differently when homebuying again.

Winter months are when buyers are more likely to find deals

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Winter is a good time for homebuyers.

NerdWallet researched two years of homes for sale on realtor.com® in 50 metro areas and found that home prices in January and February were, on average, 8.45 percent lower than homes listed in the summer months, June through August.

However, Jonathan Smoke, realtor.com®’s chief economist said that sales in October and November 2016 were stronger than usual, due to the lack of inventory on the market, so January and February may not see as low of prices as they have in the past. But NerdWallet reported that January is still a good time to buy because, on average, less people are searching for a home, instead waiting for the spring and summer, so there will be less competition. Last year, NerdWallet found there was a decrease of 47 percent in sales in January compared to June. There is also a decrease in inventory. In 2016, there were 21 percent less homes on the market in the summer compared to the winter.

“Prices are likely to increase even more than you typically see in spring because of low levels of inventory and because we didn’t see the normal weakness we see in fall,” Smoke said. “You basically face almost half of the competition with almost the same amount of inventory in the market. This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.”

In the past two Januarys, the median home on the market sold for more than $7,000 under the listing price- making winter a pretty good time for buyers.