Tag Archives: homebuyers

LendingTree Reveals Where Homebuyers See the Most Mortgage Lender Competition

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New LendingTree study shows how competitive mortgage markets are by metro area

Charlotte, NC – May 31, 2018 (PRNewswire) LendingTree®, the nation’s leading online loan marketplace, today released its study on where homebuyers see the most mortgage lender competition.

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Mortgage rates are rising, recently reaching the highest levels in seven years. One of the most effective ways borrowers can adjust to rising rates is by shopping around to get the best deal possible. LendingTree tracks the savings available each week in the Mortgage Rate Competition Index, and thus far, the potential savings through comparison shopping in 2018 is an average of $28,000 based on a $300,000 loan, almost 10 percent of the loan amount.

The mortgage market varies across the country, and lenders are active in different regions at different intensities. If more lenders are originating loans in a specific area, there could be more opportunities for borrowers to save by shopping around.

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LendingTree analysts ranked the top 50 metros by the Herfindahl-Hirschman Index (HHI), which uses a formula to calculate how competitive a market is. This is based on the recently released Home Mortgage Disclosure Act (HMDA) data, which represents over 7.3 million mortgages originated in 2017. HHI creates a score that ranges from close to zero to 10,000, with a lower number indicating less market concentration and thus greater competition among lenders, which could mean more opportunities for consumers to find lower rates by shopping around.

The ranking also includes the market share of the top 10 lenders in the metro area for an alternative measure of market concentration and includes conventional, FHA and VA loans.

Key findings from the study include:

  • All metro areas show a healthy level of competition, with the highest HHI at 521 across the three loan types. The Department of Justice considers a market moderately concentrated when the HHI is above 1,500, so values below this are viewed favorably.
  • Some of the more expensive real estate markets have the least competition among lenders for conventional loans. San Jose, San Francisco and New York are all in the bottom 10 of the ranking. Market share for the top 10 lenders is close to or above 50 percent in these cities.
  • The most competitive markets were Providence, R.I., Boston and Hartford, Conn., with top 10 market share under 40 percent.
  • Markets that are less competitive for conventional loans are more competitive for FHA loans. San Jose, San Francisco and New York are examples again. This could indicate that lenders are unable to compete in the conventional market concentrate on FHA loans in these cities.
  • FHA markets are on average more competitive than conventional, but VA markets are less competitive than conventional.
  • The competition in mortgage markets means there are opportunities for borrowers to save by shopping around.

Metro areas with the most competition for conventional mortgage borrowers

#1 Providence, R.I.

HHI: 161
Market share of top 10 lenders: 34%

#2 Boston

HHI: 171
Market share of top 10 lenders: 35%

#3 Hartford, Conn.

HHI: 173
Market share of top 10 lenders: 37%

Metro areas with the least competition for conventional mortgage borrowers

#50 San Jose, Calif.

HHI: 521
Market share of top 10 lenders: 50%

#49 San Francisco

HHI: 512
Market share of top 10 lenders: 55%

#48 Buffalo, N.Y.

HHI: 380
Market share of top 10 lenders: 54%

“With rising interest rates, it is typical to see a decline in mortgage originations as refinance volume falls,” said Tendayi Kapfidze, Chief Economist at LendingTree. “In areas where there are more lenders competing for in-market borrowers, they may have to make more enticing offers to borrowers if they want to win market share and cover their fixed business costs. This means borrowers stand to benefit by comparison shopping, a strategy that could help to minimize the impact of rising interest rates.”

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

Metros Ranked by Conventional Mortgage Market Concentration

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About LendingTree
LendingTree (NASDAQ: TREE) is the nation’s leading online loan marketplace, empowering consumers as they comparison-shop across a full suite of loan and credit-based offerings. LendingTree provides an online marketplace which connects consumers with multiple lenders that compete for their business, as well as an array of online tools and information to help consumers find the best loan. Since inception, LendingTree has facilitated more than 65 million loan requests. LendingTree provides free monthly credit scores through My LendingTree and access to its network of over 500 lenders offering home loans, personal loans, credit cards, student loans, business loans, home equity loans/lines of credit, auto loans and more. 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:

Megan Greuling
(704) 943-8208
Megan.greuling@lendingtree.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.

Pennsylvania Homebuyers Report Rapid Success In Finding A Home

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Lemoyne, PA – Feb. 20, 2018 (PRNewswire-USNewswire) Half of new Pennsylvania homebuyers are finding their home in less than three months, according to the Welcome Home survey, conducted quarterly for the Pennsylvania Association of Realtors®. And 75 percent of buyers said the process took less than six months from the time they began searching for a home until the transaction closed.

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“The current real estate market is creating some pressure on buyers to make an offer on a home more quickly and to make higher offers to ensure they get the home they want,” said PAR President Todd Umbenhauer. “With the challenging inventory situation many markets throughout the state are facing, buyers do have to make decisions in a shorter amount of time.”

The survey showed that location is a key factor for many homebuyers. “We saw 34 percent of new homebuyers chose their home because of location, whether that was what they deemed a ‘good neighborhood,’ proximity to schools, or easy travel to work,” Umbenhauer said. “Buyers over 65 focused more on interior features of a home and were driven by considerations like finding a home with one floor or a master bedroom on the ground floor.”

Pennsylvania homebuyers are sticking to traditional local banks and credit unions to get a mortgage. Thirty-five percent of new homebuyers used a local bank or credit union, while 27 percent used a mortgage broker. Only six percent of new buyers used an online-based lending company.

“The Welcome Home survey has shown consistently that Pennsylvania homebuyers choose a 30-year mortgage to purchase their home,” he added. “In fact, 49 percent of buyers under the age of 50 used a 30-year mortgage. Thirty-three percent of buyers over the age of 50 use cash to buy their home.”

The Pennsylvania Association of Realtors® is a trade/professional association that serves more than 33,000 members in the commonwealth of Pennsylvania.