Tag Archives: homebuyer

LendingTree Study Finds Denver, Los Angeles, and Portland, Ore. Have the Most Competitive Homebuyers in the U.S.

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Study ranks 50 largest metros by most competitive housing markets

Charlotte, NC – Jan. 15, 2019 (PRNewswire) LendingTree®, the nation’s leading online loan marketplace, today released its study on which cities have the most competitive housing markets.

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LendingTree ranked the 50 largest metropolitan areas in the United States based on an average of the city’s rank in three categories that contribute to the competitiveness of homebuyers in an area:

  • Share of buyers shopping for a mortgage before identifying the house they want
  • Average down payment percentage
  • Percentage of buyers who have good or excellent credit (above 680)

These criteria were chosen because the average American cannot afford to pay cash for a home — this means that most Americans need good credit to secure a loan, and enough cash to be able to make a substantial down payment. A more competitive buyer has higher credit and the ability to put down larger down payments.

Key Findings:

  • Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit and the ability to put down a larger down payment.
  • Birmingham, Ala., Virginia Beach, Va., and Pittsburgh have the least competitive buyers in the country. Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in these three areas, only 43 percent of mortgage shoppers had prime credit, compared to an average of 49 percent across the 50 largest metros in the U.S.
  • The most competitive buyers live out west. Of the top 10 most competitive cities, only two, St. Louis and Boston, were not in a western U.S. state. High-paying tech jobs, common in places like Oregon, San Francisco and Seattle, likely help fuel market competitiveness in some western cities.
  • The average down payment percent in the top 10 most competitive metros is 16 percent, two points higher than the average down payment percent found across all the cities looked at in this study. As the housing market cools, this number may fall somewhat, as sellers and lenders accommodate more potential buyers.
  • Sixty-three percent of buyers in the 10 most competitive metros shopped around for a mortgage before settling on a house. Shopping around for a mortgage can not only help buyers save money — it can also help them become pre-approved for a mortgage, which makes it easier to purchase a home.
  • Fifty-seven percent of buyers in the 10 most competitive metros have good or excellent credit. Across the 50 largest metros in the country, that number is only 49 percent. People who live in more competitive areas should make sure that they carefully monitor and maintain their credit scores.

Metropolitan areas with the most competitive buyers in the U.S.:

Denver
Share of buyers who shopped around for a mortgage before settling on a house: 67%
Share of buyers with good or excellent credit: 56%
Average down payment: 16%

Los Angeles
Share of buyers who shopped around for a mortgage before settling on a house: 64%
Share of buyers with good or excellent credit: 55%
Average down payment: 17%

Portland, OR
Share of buyers who shopped around for a mortgage before settling on a house: 65%
Share of buyers with good or excellent credit: 57%
Average down payment: 15%

“The spring housing market should see more homes on the market than last year, but inventory is still less abundant than historical norms,” said Tendayi Kapfidze, Chief Economist at LendingTree. “Potential buyers should put themselves in the best position by getting a pre-approval ahead of searching for a home. Shopping around for the best mortgage rate will also help buyers maximize their buying power and allow them to compete. Though home price momentum has slowed, prices are still rising and getting a lower rate can help offset the higher prices.”

To view the full report, visit www.lendingtree.com.

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About LendingTree
LendingTree (NASDAQ: TREE) is the nation’s leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers’ credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree’s purpose is to help simplify financial decisions for life’s meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.

Media Contact:

press@lendingtree.com

Experian Study Finds Most Millennials Need to Improve Borrowing Behaviors Before Homebuying

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Low credit scores and high delinquency rates are key themes among millennials without a mortgage

Costa Mesa, CA – Aug. 23, 2018 (PRNewswire) Experian®, the world’s leading information services company, released a study today that highlights the borrowing behaviors of millennials, the largest credit population in the United States. The study revealed only 39 percent of millennials without a mortgage have a prime or better score and the majority are facing higher delinquency rates.

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“This data presents good news for younger, thin file millennials interested in buying a home. We’re seeing that small changes in financial behaviors such as building a history of on time payments and improved credit practices can help lenders shift from viewing millennials as high-risk to low-risk relatively quickly,” said Michele Raneri vice president analytics and business development at Experian. “Knowing where you stand from a credit perspective is critical to improving or maintaining your financial well-being.”

To better understand the borrowing behaviors of the next big wave of homebuyers, Experian looked at personal loan trends, credit scores, bankcard behaviors and mortgage trends of 60 million millennial consumers.

According to a recent study from the National Association of Realtors, 86 percent of millennials believe that buying a house is a good financial investment, yet Experian’s research shows only 15 percent have a mortgage today. In addition, with 61 percent of millennials near prime or worse, many will need to improve personal loan and bankcard usage habits to obtain lower rates when they’re ready to secure a mortgage.

“Often, young people start their credit journey with a couple of mistakes first, but in the end, these mistakes create opportunities to learn how to use and build credit responsibly,” said Rod Griffin, director of consumer education and awareness at Experian. “We believe everyone deserves access to quality credit and homeownership. This study presents clear areas of opportunity for millennials as they age and prepare to enter the mortgage market.”

Key study findings

  • In the U.S., the average consumer VantageScore® is 677 and credit scores generally become more prime (661-780) as people age. Younger millennials (age 22-28) have an average near prime score of 652 with older millennials (age 29-35) at the prime score of 665.
  • Millennials without a mortgage have an average age of 28, income of $33,000, 623 VantageScore and eight trades on file. Of them, 39 percent are viewed as prime or better (661 or higher).
  • Personal loan originations are dominated by older generations. Over the last four years, millennials account for 21 percent of all new personal loan dollars with a 40 percent increase in balances since 2011.
  • Younger millennials have an average per loan balance of approximately $7,300 while older millennials have an average balance of approximately $11,700.
  • Nationally, delinquency rates on personal loans are on the decline at 1.32 percent. Millennial delinquency rates as of 4Q17 stand at 2.08 percent for younger millennials and 1.51 percent for older millennials.
  • As of the fourth quarter in 2017, millennials account for 20 percent of new bankcard dollars. On average, younger millennials carry a balance of just under $3,000 with older millennials carrying approximately $7,500. Millennial bankcard delinquency rates are higher than the U.S. average of 1.54 percent at 2.33 percent for younger millennials and 2.18 percent for older millennials.

Today’s millennial homebuyer

In the last quarter of 2017, millennials accounted for 23 percent of newly originated mortgage dollars. On average, millennial homebuyers are 31 years old with an income of $64,000. The average mortgage balance for younger millennials is $167,000 and $210,000 for older millennials.

When it comes to credit scores, 77 percent of millennials with a mortgage have a 661 VantageScore or greater with an average score of 716 and 16 trades on file. Geographically, millennial homebuyers are most prevalent in the south and west regions where three-four percent of the millennial population have a mortgage.

About Experian

Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organizations to prevent identity fraud and crime.

We have 16,500 people operating across 39 countries and every day we’re investing in new technologies, talented people and innovation to help all our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are a constituent of the FTSE 100 Index.

Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.

Media Contact:

Amanda Irving
Experian Public Relations
(714) 830 – 7923
Amanda.irving@experian.com

Redfin Survey: 35% of Recent Homebuyers Bid on a Home Before Seeing it in Person

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45% of Millennial Homebuyers Made an Offer Sight-Unseen; More than Half of Respondents in Los Angeles Did So

Seattle, WA – Feb. 26, 2018 (PRNewswire) (NASDAQ: RDFN) Thirty-five percent of people who bought a home last year said they made an offer without first seeing it in person, according to a late-2017 survey commissioned by to Redfin (www.redfin.com), the next-generation real estate brokerage. That’s up from 33 percent in May 2017, and 19 percent in June 2016.

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This is based on a Redfin-commissioned survey conducted in November and December 2017, which included responses from 1,503 people who purchased a home in the previous 12 months. Today’s report is the final issue of a three-part series on the results of the survey. The first and second reports focused on politics and the housing market.

Millennial homebuyers were even more likely to make an offer sight-unseen, with 45 percent in November and 41 percent in May saying they had done so. These results likely reflect millennials’ comfort relying on information they find online about homes for sale, neighborhoods they might not have visited in person, and the home-buying process in general.

More than half (57%) of respondents who bought a home in Los Angeles last year made an offer sight-unseen. The prevalence of foreign investors in L.A. may have played a role in sight-unseen offers’ popularity there. The market-by-market breakdown below shows that the trend was also driven by buyers in other competitive California metros, with 46 percent in San Diego and 44 percent in San Francisco having done so.

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People who can’t get in to tour a home right away because they’re busy or relocating from out of town often rely on tools like Redfin 3D Walkthrough and FaceTime® to explore the home itself, and the vast array of statistics, reviews, maps and articles online that can help a prospective buyer understand what it’s like to live in a neighborhood. However, in the case of offering sight-unseen, the agent can be a buyer’s greatest resource.

Angela Hunter, a Redfin agent in Omaha, worked with a family relocating from Jacksonville, Florida to Offutt Air Force Base in Bellevue, Nebraska.

“This family had a only a few weeks to find a home and they did not want to live on-base or rent,” Hunter said. “Because the wife was 8 months pregnant at the time, they needed a move-in ready home within 20 minutes of the base. While conducting video tours with them, I was very careful to explain things that they would not be able to experience virtually, like the sounds, smells, and textures. I pointed out flaws that are hard to detect through video so that nothing would be a surprise to them once they visited in person. It’s not the easiest way to shop for a home, but together we found the perfect match.”

With no end to the housing shortage in view and more millennials entering the housing market, the trend toward sight-unseen bids is likely to grow in 2018.

To read the full report, complete with data, charts and a full methodology, please visit: www.redfin.com.

About Redfin

Redfin (www.redfin.com) is the next-generation real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer’s favor. Founded by software engineers, Redfin has the country’s #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry’s lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 80 major metro areas across the U.S. The company has closed more than $50 billion in home sales.