Federally funded education and counseling programs aim to help prepare consumers for sustainable homeownership and financial health, two challenges at the heart of the housing crisis. Using data from the U.S. Department of Housing and Urban Development’s (HUD’s) First-Time Homebuyer Education and Counseling Demonstration, Abt identified characteristics that predict prospective first-time homebuyers’ participation in free education and counseling services. These findings—recently published online in the Journal of Consumer Affairs—may help homebuyer service providers tailor the training to those who need it most.
Knowing Your Audience
Almost 6,000 prospective first-time homebuyers from 28 large metropolitan areas enrolled in the First-Time Homebuyer Education and Counseling Demonstration and were randomly assigned to control and treatment groups. The treatment groups were offered free access to:
- In-person services only (group education workshops and in-person, one-on-one counseling),
- Remote services only (online, Internet-based education and telephone-based, one-on-one counseling) or
- Their choice of in-person or remote services.
Abt investigated the characteristics that predict the use of in-person and remote services. The team then examined the findings to understand the “type” of consumer who takes up homebuyer education and counseling services.
Results from the analysis include:
- Remote services were more popular. Roughly three-fourths of participants who were offered their choice of service mode expressed a preference for remote over in-person services. Among those offered in-person services, about one-fourth accepted that offer. In contrast, approximately two-thirds of those who were offered remote services accepted the offer.
- Women and those with relatively higher levels of education were more likely to participate in services. However, race and ethnicity, age, marital status and household size were not statistically significant predictors of participation in services.
- Early-stage buyers participated more often when offered in-person services. Those planning to purchase a home without a co-borrower also were more likely to take up services.
- People who identify as being “pretty good at math” participated more often when offered in-person services. Additionally, those referred to remote services were more likely to participate if they scored better on a mortgage literacy quiz or had a baseline credit score of 740 or higher.
“The findings in this analysis provide lessons for how agencies market homebuyer education and counseling services to prospective clients,” said Shawn Moulton, Ph.D., Abt scientist and one of the authors of the study. “This research sample comes by way of lender referrals and is not typical of the clientele that federal agencies target and serve, but the sample still serves as a rich and diverse source of useful information.”
About Abt Associates
Abt Associates is an engine for social impact, dedicated to moving people from vulnerability to security. Harnessing the power of data and our experts’ insights, we provide research, consulting and technical services globally in the areas of health, environmental and social policy, technology and international development. http://www.abtassociates.com