Summary of - Antecedents of Customer Mortgage Shopping Satisfaction: The Mediating Role of Search Intensity Evidence from the NSMO Survey

Document Type

Article

Abstract

This study investigates the antecedents of customer satisfaction in mortgage shopping in the U.S., focusing on the roles of knowledge, familiarity, and search intensity. Using data from the National Survey of Mortgage Originations (NSMO) and employing PLS-SEM for analysis, the research examines how these factors influence satisfaction among 4,512 mortgage customers. The findings reveal that familiarity (β = 0.23) and knowledge (β = 0.16) significantly impact satisfaction, with search intensity as a crucial mediator. The study underscores the importance of mortgage providers educating customers and establishing a presence on comparison websites to enhance satisfaction.

Study Background: The study investigates the factors influencing customer satisfaction in mortgage shopping in the U.S., given the high demand post-COVID-19.

Research Goals and Hypotheses: The primary goal is to determine how knowledge, familiarity, and search intensity impact customer satisfaction in mortgage shopping.

H1: Higher objective mortgage knowledge negatively influences satisfaction.

H2: Higher familiarity with mortgages positively influences satisfaction.

H3: Search intensity positively influences satisfaction.

H4(a): Search intensity mediates the relationship between knowledge and satisfaction.

H4(b): Search intensity mediates the relationship between familiarity and satisfaction.

Methodological Approach: The study uses PLS-SEM to analyze data from the National Survey of Mortgage Originations (NSMO) involving 4,512 customers who purchased mortgages between 2019 and 2020.

Results and Discoveries:The study found that both familiarity (β = 0.23, P = 0.01) and knowledge (β = 0.16, P = 0.01) of mortgages significantly impact consumer satisfaction during the mortgage purchase. Additionally, search intensity is crucial in the relationship between knowledge, familiarity, and satisfaction (P = 0.01). The findings indicate that customers with greater familiarity and knowledge about mortgages tend to be more satisfied with their mortgage shopping experience. Moreover, the intensity with which customers search for mortgage information mediates the effects of their knowledge and familiarity on their overall satisfaction. This highlights the importance of mortgage service providers prioritizing educating customers about the online and in-person mortgage process to help set realistic expectations and improve satisfaction levels. Additionally, establishing a presence on third-party mortgage comparison websites is recommended to ensure that customers actively consider various alternatives, thereby enhancing their satisfaction with the mortgage shopping process.

Citation to the base papers:

Alexandrov, A., & Koulayev, S. (2018). "No shopping in the US mortgage market: Direct and strategic effects of providing information." Consumer Financial Protection Bureau Office of Research Working Paper(2017-01).

Damen, S., & Buyst, E. (2017). "Mortgage shoppers: How much do they save?" Real Estate Economics, 45, 898-929.

Johnson, E. J., & Russo, J. E. (1984). "Product familiarity and learning new information." Journal of Consumer Research, 11, 542.

Perry, V. G., & Lee, J. D. (2012). "Shopping for a home vs. a loan: The role of cognitive resource depletion." International Journal of Consumer Studies, 36, 580-587.

Woodward, S. E., & Hall, R. E. (2012). "Diagnosing consumer confusion and sub-optimal shopping effort: Theory and mortgage-market evidence." American Economic Review, 102, 3249-3276.

Publication Date: 22/August/2022

Recommended Citation: Reddy N, S. and Thanigan, J. (2023), "Antecedents of customer mortgage shopping satisfaction: the mediating role of search intensity, evidence from the NSMO survey", International Journal of Housing Markets and Analysis, Vol. 16 No. 6, pp. 1089-1109. https://doi.org/10.1108/IJHMA-06-2022-0094

Publication Date

2023

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