It’s long been held by real estate pros that mistakes can be prevented if home buyers are educated about the buying process, but recent studies suggest that isn’t quite true.
In this month’s edition of Insight and Outlook, Freddie Mac officials say that early studies on the impact of home buyer education produced conflicting or inconclusive results about its effectiveness.
One study of 40,000 home buyers involved in Freddie Mac’s Affordable Gold Loans Program found that those who received training on the home buying process at home or in a classroom environment were 26 and 21 percent less likely to fall into serious delinquency. Those who had individual counseling from experts were 34 percent less likely to become seriously delinquent.
That might seem cut and dried, but some critics say these reductions can’t necessarily be linked to home buyer education.
“Perhaps the borrowers who received counseling also were more high-educated than the borrowers in the other group,” Freddie Mac’s article notes. “Maybe they had a greater disposition or ability to apply the information provided by the education course. Maybe they had higher credit scores than the other borrowers.”
Still, a 2014 study by the Federal Reserve Bank of Philadelphia that evaluated first-time home buyers who received education prior to buying a home, contrasts with Freddie Mac’s own findings. It found that home buyers who’d received one-on-one budgeting and home buying process instructions, and attended a two-hour workshop on the process, managed to raise their credit scores by an average of 16.2 points.