Potential homebuyers want more assistance with their buying process, according to the recent TD Bank Mortgage Service Index. The Index notes that homebuyers are optimistic, with 83% saying it’s a good time to buy a home and 30% are very or extremely likely to buy a home in the next three years.
More homebuyers than ever are using online processes when buying a home. TD Bank states that the number of homeowners who applied for a mortgage online has increased from one in eight (13%) in 2014 to more than one in five (21%) this year.
“Digital platforms are speeding up mortgage processing on the front and back ends,” said Rick Bechtel, Head of U.S. Residential Lending for TD Bank. “When borrowers leverage online platforms for providing documents and completing necessary forms, we have found it reduces information intake time by more than 60% on average.”
Many buyers still need guidance in some areas. TD Bank notes that 82% of consumers today believe they have enough resources to educate themselves on the mortgage process, compared to 90% in 2019.
Around 30% of homeowners received $2,000 or more in unexpected charges during the home buying process, with another 42% stating that they are unaware of affordability programs. Additionally, despite the fact that 52% of homeowners plan on staying in their home for less than 10 years, 74% of homeowners took out a 30-year fixed rate or 15-year fixed rate mortgage.
While affordability is improving, affordability is still a problem for homeowners as well as renters in many metro areas. According to Freddie Mac, the largest metro areas are the most rent-burdened.
“Rental affordability is a significant challenge for metropolitan areas across the United States,” said Steve Guggenmos, VP of Freddie Mac Multifamily Research and Modeling. “The vast majority of the units Freddie Mac finances are affordable. Even so, our research shows that supply just hasn’t kept pace with demand in many metros, and that’s pushing affordable rents out of reach for millions of American families.”