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Th e M Rep o RT | 39 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t Department ORIGINATION the latest survey Finds that Homebuyers Want confidence in credit scores Many are waiting to buy until credit has approved. CALIFORNIA // According to a recent survey from Experian Consumer Services (which has operational headquarters in Costa Mesa, California), 95 percent of homebuyers are aware that credit scores play a significant role when purchasing a home, and those who know their credit scores feel more prepared to buy. In addition, 45 percent of future homebuyers say they put off buy- ing a home in order to work on their credit, so they can qualify for better interest rates. "No one likes to go into a lender's office, whether buying or refinancing, and not know the state of their credit," said Becky Frost, senior manager of consumer education at Experian Consumer Services. "It makes them feel helpless. Our survey shows when people interact with their credit by tracking it and learning more about the factors that affect it, they feel more confident about their purchasing power." Experian's survey results dis- play the effect that knowledge of credit can make in the home- buying or refinance process. The survey was given by Experian Consumer Services, produced by research firm Edelman Berland, and conducted as an online survey of 500 buyers from April 7 through 14. The buyers were split between 250 adults who purchased a home within the past year and 250 adults who plan to purchase a home in the next year. The margin of error was plus or minus 4.4 percent overall. According to the survey, 70 percent of people who know their credit scores feel signifi- cantly more prepared to buy a home versus the 54 percent of those who do not know their credit scores. About 62 percent of homebuyers know that their credit scores could mean favor- able interest rates to refinance their home. Future buyers are sometimes uncertain about the homebuying process, the survey says. They are usually anxious about receiving good interest rates, with 41 per- cent concerned their credit score will not qualify them for the best rate available. Of the respondents that expressed concern about their credit status hurting their ability to buy a home, 27 percent do not even know their credit score. Of those who do not know their credit score, 48 percent are concerned that their credit status could hurt their ability to pur- chase a home. Actively working to improve their credit score has become a priority for 58 percent of future homebuyers so they can qualify for a better home loan inter- est rate, Experian reported. Of those who are making an effort to improve their credit score, 55 percent are paying off debt, 54 percent are paying bills on time, 28 percent are keeping credit card balances low, 20 percent are protecting credit card informa- tion from fraud/identity theft, and 16 percent are not applying for or opening new credit card accounts. Seventy-four percent of recent buyers indicated that they under- stood the impact a poor credit score can have on getting a good interest rate, but 61 percent know the potential effects of identity fraud on the financing process. Sixty-two percent of future buyers are confident about their credit sta- tus, and 60 percent feel financially prepared to buy a home. strong Buyer demand driving nearly 80 Percent of top 100 U.s. Housing markets eMployMent and low rates both play a role in iMproved Market perforMance. WASHINGTON, D.C. // The Multi- Indicator Market Index (MiMi) released monthly by Freddie Mac, revealed in late May that the housing market is continuing to stabilize, with the most improving metro markets seeing stronger de- mand for home sales in the spring homebuying season. Despite strong house price appreciation, low mortgage rates are keeping payments affordable, according to consumers' incomes for the typical family in the market. "The nation's housing markets are getting back on track," said Len Kiefer, Freddie Mac's deputy chief economist. "Better employment prospects, rising home values, and increased purchase activity are all driving improvements in housing markets across the country." According to the data, the national MiMi value is 75.4. Overall, this indicates a weak housing market, but it is an improvement of 0.69 percent from February to March and a three-month improvement of 1.24 percent. On a year-over-year basis, the national MiMi value has improved 3.11 percent. The MiMi value high was 121.7 and occurred in April 2006, and its low hap- pened when the housing market was at its weakest in October 2010 at 57.4. Since that time, the national MiMi value has made a 31.3 percent turnaround. "In this month's MiMi three more states and seven metro areas moved within range of their benchmark level of activity, Keifer said. "However, as we've mentioned before, we're likely to see bouts of affordability shock with mortgage rate swings for the remainder of this year, as market participants try to anticipate Fed timing around rising short-term interest rates and expectations for global growth wax and wane." Mimi Index Facts: • In March, 36 of the 50 states and 77 of the 100 metros were showing an improving three- month trend. The same time last year, 40 states plus the District of Columbia and 82 of the top 100 metro areas were showing an improving three-month trend. • Seventeen of the 50 states plus the District of Columbia have MiMi values in a stable range, with North Dakota (95.8), the District of Columbia (95.6), Hawaii (90.5), Montana (90), and Wyoming (85.7) ranking in the top five. • Twenty-five of the 100 metro areas have MiMi values in a stable range, with Honolulu (91.8), Fresno (90.5), Austin (88.8), Los Angeles (86.8) and McAllen, Texas (86.4), ranking in the top five. "The West and Southwest areas of the country are showing some of the strongest housing activity, espe- cially markets like Portland, Denver, Dallas, San Jose, and Los Angeles," Kiefer said. "Many markets in the South and Midwest, while improv- ing, are still plagued by high rates of mortgage delinquencies, which are holding back these markets from recovering faster." ORIGINATION local eDition "The nation's housing markets are getting back on track." —Len Kiefer, deputy chief economist, freddie Mac