Shopping around: Empirical analysis of borrower comparison shopping and mortgage prices

Kristoffer (Kip) Jackson and Garrett T. Senney

Real Estate Economics, 2025, vol. 53, issue 1, 101-133

Abstract: Using a novel approach to identifying mortgage price shopping on the universe of mortgages from 2018 to 2020, we find that relatively few borrowers shop, but those who do end saving roughly 11 basis points on average. We also find significant differences by race in the incidence and benefits of shopping. When borrowers do shop, a vast majority engage in simultaneous search. Shoppers show a swifter movement away from commercial banks toward fintechs. Shoppers tend to be more creditworthy, wealthier, live in more urban areas, and apply more often with nondepository lenders. Minority shoppers show less affinity to minority‐owned lenders than corresponding nonshoppers. We also provide evidence that shopping is likely significantly overreported in available survey data.

Date: 2025
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https://doi.org/10.1111/1540-6229.12512

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