Mortgage shoppers are most influenced by real estate agents and lenders, more so than online sources, a new study by Fannie Mae finds.

Housing consumers on the hunt for a new home and financing to pay for it are going online more and more to learn about properties for sale and the mortgage process. But “person-to-person engagement” still plays a key role.

A new “Special Topic study” from Fannie Mae found that lenders and real estate agents — pros who offer a personal, sometimes hand-holding approach — were more influential than online sources during the search for financing.

Source: Fannie Mae

The study, in which 32 percent of respondents ranked mortgage lenders as the most influential and 30 percent said real estate agents held the most sway, seems to support the National Association of Realtors (NAR) annual Profile of Homebuyers and Sellers survey in reporting that online resources and professional expertise are not mutually exclusive as most consumers navigate this major financial transaction.

In 2016 NAR found that the vast majority of consumers still work with a real estate agent (90 percent), while 95 percent of home shoppers are going online at some point during the process.

Source: Fannie Mae

“By a wide margin, the most influential sources are industry professionals who offer a personal touch,” said Steve Deggendorf, director of market insights research at Fannie Mae.

In the Fannie Mae study, online resources were favored by only 13 percent of respondents, lagging “well behind” personal interactions. According to Deggendorf, borrowers “told us that mortgage lenders, real estate agents, and family and friends are seen as more trustworthy and credible than online sources.”

At the same time, online sources “are seen as much more useful and convenient,” he added. Consumers often use online mobile devices during the process and want to use mobile devices nearly twice as often in the future, the study found.

Source: Fannie Mae

According to Deggendorf, millennials may provide a glimpse of where consumers will look for guidance in making mortgage decisions going forward.

The study found that 18 to 34 year olds reported using mortgage lenders, real estate agents, online sources, and family and friends with similar frequency as sources of information for mortgage shopping. They are also the most frequent users of real estate agents and online sources compared with the total sample of recent borrowers.

However, the most influential sources of information for millennials are mortgage lenders, real estate agents, and family and friends — not online sources.

“Since consumers’ understanding of the mortgage qualification process is uniformly poor across different age groups, as shown in our prior research, young consumers may continue to look to more traditional person-to-person sources for mortgage information and reassurance,” Deggendorf said.

However, both sources of information face challenges as mortgage influencers, the study also found. “Online sources have more work to do to gain trust and credibility in order to play a greater role influencing consumers,” the researcher said.

At the same time, person-to-person sources “need to be vigilant” as advances in online technology deliver improved experiences and outcomes, which may lead to increased trustworthiness, credibility and influence over time.

To remain competitive, he said, lenders and real estate agents need to continue to evolve their digital offerings to provide a multi- or omni-channel experience that allows consumers to move conveniently between online and personal interactions to create the experience that best suits their needs.

About the survey

The survey data is based on 1,000 live phone interviews with Americans 18 and older conducted by PSB in coordination with Fannie Mae. Fannie Mae, a public-sponsored government enterprise that buys mortgages from primary lenders and packs them into securities for sale to investors world-wide, surveyed recent borrowers about their experiences with agents, lenders, friends and family. Researchers also quizzed borrowers about online resources such as mobile apps, websites and social media. The survey sample was constructed from borrowers with purchase mortgages in the Fannie Mae book of business that were originated in 2016.

Lew Sichelman’s weekly column, “The Housing Scene,” is syndicated to newspapers throughout the country.

Email Lew Sichelman

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