Americans Spend More Time Researching a Car Purchase than Their Home Loan, According to Recent Zillow.com® Survey
Borrowers plan to secure more quotes in the future; primary concerns for borrowers include protecting personal information, getting the best rate and not exceeding their monthly housing budget
Apr 3, 2008
SEATTLE, April 3, 2008 /PRNewswire/ -- Despite the fact a home is one of the largest and most expensive purchases most Americans will ever make, those adults who have obtained or refinanced a home loan in the past 5 years typically spent only 5 hours researching a home loan, according to a recent survey(1) of 2,897 adults conducted by Harris Interactive® on behalf of leading real estate website Zillow.com. In fact, more time is typically spent researching a car purchase (8 hours) or major home improvements, such as a kitchen remodel (10 hours), and equal time is spent planning a single vacation (5 hours)(2). When calculated as time spent per dollar invested, this means Americans typically spend almost 80 times more time researching their vacation (.159 min./dollar) than a home loan (.002 min./dollar).
More Quotes Expected on Future Home Financing Activity
In retrospect, borrowers seem to indicate a desire to be more informed in the future. Those who obtained or refinanced some type of mortgage or home loan in the last five years secured an average of 4 quotes, but those who plan to obtain or refinance a mortgage or home loan within the next year say they expect to obtain 6 quotes, on average.
Home-Related Typical Hours Average Cost Minutes Spent Investment of Research(2) Per Dollar Vacation 5 $1883(3) per week .159 Mortgage or Home Loan 5 $135,313(4) (home) .002 Car 8 $28,7159(5) .017 Home 39 $224,890(6) .102 Major Home Improvements 10 $47,500(7) .013 Computer 4 $3000(8) .080 Television 2 $783(9) .153 82% of Borrowers have Concerns about Securing Next Home Loan
Of adults who say they plan to be in the market for a mortgage or home loan in the future (mortgage, refinance, HELOC or other home loan), 82% of them say they have concerns about doing so. The primary concern among these borrowers is having their personal information sold or shared with multiple lenders (58%). The top five concerns:
-- Having personal information sold or shared with multiple lenders (58%) -- Sharing personal information and credit score with multiple lenders (55%) -- Missing the opportunity to get the best rate (54%) -- Ending up with a monthly payment that is greater than original budget (48%) -- Not understanding the terms and financial implications of the loan (41%)
"What most people don't realize is the type and terms of a loan are often more significant than the actual purchase price as these factors can dramatically affect the affordability of a home," said Spencer Rascoff, Zillow chief financial officer. "Financing a home is one of the largest investments most people will make in a lifetime yet people typically put more time into buying a car and as much time into researching a single vacation than they do a home loan. Despite this clear imbalance of effort, we're encouraged that borrowers, on average, say they plan to secure more quotes on the loan they plan on obtaining or refinancing within the next year, which we think signals a desire for greater options and information to help alleviate the primary concerns of borrowers."
Of those who plan to be in the market for a home loan in the next year, -- Nine out of 10 (91%) agree a standardized quote form would make it easier to compare loan quotes from multiple lenders. -- 82% believe the recent interest rate cuts by the Federal Reserve make it more attractive to shop for a home loan. -- 77% say they would obtain more mortgage or home loan quotes if they could do so anonymously. -- 61% rely/would rely on others' input when selecting a mortgage lender. -- 56% would obtain more mortgage or home loan quotes if I had more time to do so.
"Zillow has expanded into the home financing arena with today's launch of Zillow Mortgage Marketplace that we designed to help illuminate the complicated lending process and provide borrowers greater control and transparency than exists elsewhere and addresses many of the common borrower concerns and preferences," added Rascoff.
For more information on Zillow® and its new Zillow Mortgage Marketplace, visit the Zillow Press Room at http://zillow.mediaroom.com/. To see how these survey results compare to those from Zillow users, visit the Zillow Blog.
Zillow.com is an online real estate community where homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes, for free. Launched in early 2006 with Zestimate® values and data on millions of U.S. homes, Zillow has since opened the site to community input, data and dialogue. One of the most-visited U.S. real estate Web sites, Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process -- buying, selling, remodeling and financing. The company is headquartered in Seattle and has raised $87 million in funding. Zillow.com, Zillow, Zestimate and Zindex are registered trademarks of Zillow, Inc.
(1) The Home Spending survey was conducted online by Harris Interactive within the United States on behalf of Zillow.com between March 6 and March 10, 2008, among 2,897 adults ages 18+, of whom 1,821 are homeowners. This online survey is not based on a probability sample and therefore no estimates of theoretical sampling error can be calculated; a full methodology is available. (2) Median number of hours among adults who purchased each item and spent at least one hour researching and shopping before doing so. Sample sizes vary. (3) AAA 2007 Vacation Costs Survey. Cost per day for a family of two adults and two children. (4) Based on averaging loan type data from the MBA's Residential Mortgage Market and Its Economic Context 2007 report. (5) Auto Affordability Index compiled by Comerica Bank in Detroit for Q4 2007. (6) Zillow Q4 Report Zindex® Median Home Value Indicator (7) Based on averages from Remodeling magazine. (8) WikiAnswers (9) Consumer Electronics Association (Logo: http://www.newscom.com/cgi-bin/prnh/20060503/ZILLOWLOGO)
CONTACT: Sarah Mann of Zillow.com, +1-206-470-7171, firstname.lastname@example.org
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