Yes, God exists in minds of people. Then you may ask does it exist in reality? Take a look at this quote from "The Matrix".
"If real is what you can feel, smell, taste and see, then 'real' is simply electrical signals interpreted by your brain."
Well, real seems so un-real now. doesn't it? :-)
The most "real" place anything can exist is someone's mind. Since God exists in many (many!!!) minds. It should be more real than you or me.
Neo: I thought it wasn't real
Morpheus: Your mind makes it real
" - From 'The Matrix'