More than one-third of all adults and half of millennials could be looking to purchase a home within the next two years.
That’s according to a new study commissioned by $23.7 billion-asset Pentagon Federal Credit Union, which revealed nearly half (48 percent) of respondents who aren’t currently home owners expect to be house hunting within the next few years. Moreover, 65 percent of homeowners surveyed said they did not shop around for a mortgage, despite the fact that a home is generally the largest purchase a consumer makes in his or her lifetime.
In line with that, PenFed identified a number of consumer misconceptions surrounding mortgages, including:
- 44 percent of consumers believe the best mortgage is the one with the lowest interest rate
- Fewer than half (48 percent) of consumers understand that being pre-qualified is not the same as being pre-approved for a mortgage. Nearly a quarter of respondents (22 percent) were unsure of the difference
- 58 percent believe adjustable rate mortgages are for risk-takers, rather than consumers only planning ot live in their home for a short period of time.
PenFed found that while nearly all (95 percent) Americans like their homes, more than half (54 percent) are also interested in making renovations.
“Americans are undeterred when it comes to owning their dream home and we are finding that for many that means renovating their current homes,” stated Craig Chapman, PenFed’s VP of mortgage sales and business development. Chapman added that second trust loans are on the rise at the credit union, which expects to close out the 2018 with a 20 percent year-over-year increase.
The survey was conducted by McLaughlin & Associates, a market research firm, McLaughlin & Associates, on behalf of PenFed.
Credit unions continue to see growth in the mortgage space. According to the latest Credit Union Trends Report from CUNA Mutual Group, credit union mortgages were up 4.7 percent during the first half of 2018, compared with 5.6 percent during the first half of 2017. Despite that, first mortgage balances were up by 1.5 percent in June, compared with 0.9 percent reported in June 2017, while adjustable-rate first mortgage balances rose by a whopping 7.9 percent during the first two quarters of the year – more than triple the rate of growth from the first half of last year.
Overall, CU real estate loans are up by 9.9 percent year-over-year as of June, compared with 9.5 percent in 2017. Credit unions hold $420 billion in first mortgages on the books, or 4.1 percent of the entire mortgage market.
