Survey: Home Buyers Spend More Time Researching Car Purchase than Home Loan

It is, as the saying goes, the most important investment a person will make in their lifetime.

But a survey from Zillow Inc., Seattle, said when it comes to a home purchase, more Americans are spending less time doing research and option-shopping than they do for a car.

The survey said more than half of borrowers spend five hours or less shopping for home financing options, On average Americans spend just eight hours researching their home loan and obtain just four quotes from lenders. One in five (18 percent) surveyed spend an hour or less shopping for their home loan.

By contrast, borrowers spend more time researching a car purchase (11 hours) and an equal amount of time researching a vacation (eight hours), despite that these items cost a fraction of the average cost of a home. Zillow said the median home ($185,000) costs five times more than the average car ($34,000) and 80 times more than the average vacation ($2,800).

“When it comes to spending money on our daily expenses, we all understand the value in taking time to shop around, compare product reviews online or research retailers to ensure we are making a wise purchase,” said Erin Lantz, vice president of mortgages for Zillow Group. “Yet surprisingly, very few prospective homebuyers apply that same diligence to choosing a lender and a home loan, despite the fact that is likely the largest purchase they will ever undertake.

Lantz said such a mistake could be costly-“a small difference in the interest rate can add tens of thousands of dollars to your mortgage,” she said.

The survey said Millennials, who face obstacles such as student debt and high rents that can impact their ability to save for a down payment, are approaching the home buying process more wisely. Zillow said Millennials (age 18-34), on average, spend more time than Generation X (age 35-54) or Boomers (age 55 and older) researching or shopping for a mortgage. Millennials are also more likely than older adults to shop around for a mortgage and compare apples-to-apples rates: 86 percent of 18-34 year-olds shopped around for a loan versus 75 percent of 35-54 year olds and 55 percent of those 55 years and older.

The survey also noted across most types of homes loans, Millennials report obtaining more quotes from lenders than do their older counterparts: on average, Millennials obtained six quotes, compared to four quotes by Gen X shoppers and three quotes by Boomers.