Home buying confidence and mortgage experiences in the U.S. have improved over the last year, according to TD Bank's third annual Mortgage Service Index. The survey reveals that 30 percent of Americans consider now to be a very good time to purchase a home, compared with just 20 percent in 2014, and 29 percent of consumers are likely to purchase a home this year, compared with 21 percent in 2014. 

The Mortgage Service Index, a national survey of more than 1,450 consumers who purchased a home within the last 10 years, examines consumers' home buying experiences and mortgage behaviors.

While the number of consumers who have purchased homes within the past two years has increased by five percent since 2014, Americans still face obstacles in the home buying process. According to the Index, two in five consumers feel there is a lack of inventory in their price range and 44 percent are not familiar with home affordability programs. 

"The Mortgage Service Index found that only 28 percent of consumers are successfully using mortgage affordability programs, which demonstrates that a significant number of potential buyers may be missing the opportunity to purchase a home," said Malcolm Hollensteiner, Director of Retail Lending Sales and Production, TD Bank. "In our current housing market, a critical first step for buyers is to educate themselves on the financing process by speaking with multiple lenders and learning about the loan options available to them. Lenders today should be working with borrowers on a case-by-case basis in order to find the loan option that best meets their needs and budget."

Resources available, but more education desired
While the majority of buyers (86 percent) feel they had sufficient resources to educate themselves about the process, 51 percent of respondents believe banks could offer more relevant, helpful information online and 49 percent believe banks could provide better frontline training to equip loan officers to more clearly explain options.

There is a particularly strong desire for better educational resources among first-time homebuyers. According to the Index, 52 percent of this key demographic feels banks could offer additional home financing seminars and workshops (compared with only 40 percent of all respondents) and 58 percent of first-time homebuyers say they were looking for additional information online (compared with 51 percent of all respondents).

The Index also found that buyers continue to seek information on home financing through one-on-one meetings with realtors and lenders (45 percent). At the same time, the use of digital resources is on the rise, particularly among younger homebuyers. For example, millennial buyers said they obtained information from the following sources:

• Bank websites (56 percent vs. 43 percent nationally) 
• Comparison/expert websites (35 percent vs. 23 percent nationally) 
• Social media (22 percent vs. 10 percent nationally)

Millennials are more optimistic, plan to purchase homes this year
Half of millennials surveyed said they are either very or extremely likely to purchase a home within the next year, supporting the prediction that this generation will drive the housing market in 2015. Additionally, more than one-third of millennials consider now a very good time to purchase a new home. This data aligns with recent findings from TD Bank's Fiscal Fit survey on financial goals, which shows that millennials are more aggressively making and meeting financial goals compared with older generations. 

However, millennials continue to face more barriers to homeownership than the national average. A number of factors more negatively affected millennials' home purchasing decisions, including:

• Lack of knowledge and confidence in understanding how to navigate the home financing process (32 percent vs. 20 percent nationally) 
• Mortgage rates (27 percent vs. 18 percent nationally) 
• Non-mortgage debt (25 percent vs. 15 percent nationally)

Despite this, the majority of millennials (64 percent) rank their experience getting approved for a mortgage as excellent or very good.

The home buying experience is improving
The Mortgage Service Index found that overall home buying experiences have improved over the last year. Sixty-eight percent of respondents say their most recent experience was excellent or very good, compared with 62 percent in 2014. These numbers were even higher among first-time homebuyers (69 percent) and buyers who purchased a newly constructed home (81 percent). 

Consistent with last year's Index, more than half of respondents said they had excellent or very good experiences with the following aspects of buying a home: 

• Finding a good realtor (59 percent) 
• Finding the right lender (57 percent) 
• Getting approved for a mortgage (65 percent) 
• Length of the entire process (52 percent) 

One aspect that saw a slight decrease in satisfaction this year was finding a home (54 percent compared with 57 percent last year), which aligns to survey findings on lack of inventory. 

"Nearly three-quarters of first-time home buyers applied for their mortgage in-person and just as many rate their experience as excellent or very good," said Hollensteiner. "We continually see more positive home-buying experiences among borrowers who engage in face-to-face interactions with lenders. This is also true for those who obtain a mortgage with a financial institution committed to guiding them through the process and maintaining an open, effective relationship with them and their realtor."