A recent study conducted by Realtor.com, analyzes the current status of today’s buyer and their goals of home ownership.
- Older Millennials (25-34) dominate current home shoppers, making up 33% of the market. First-time buyers account for 52% of the future buying potential.
- Top goals among all home shoppers are privacy, family needs, and asset accumulation.
- Most desired features in homes are good-quality construction, larger yard and located in a safe neighborhood.
- Primary triggers of home shopping are tiredness of current home, favorable home prices, and change of family circumstances.
- Concerns shared among home shoppers are finding a house within budget and/or fitting their needs, and a lack of funds for down payments
The peak of summer home buying season just passed, and the cycle is rebooting. In September 2016, 34% of Realtor.com site visitors planning to purchase reported they just started to explore and need more time to research their future homes. And 52% of the homebuyers set their eyes on 7 or more months from now, which is next spring and summer.
According to the panel of survey respondents, the top goal is to have more privacy; shoppers allocate 18 points out of 100 available points to wanting a place of solely their own. Family comes second; our shoppers assigned 16 points to needs of their immediate family and children. The third goal is to grow assets and wealth through homeownership, with 13 points allocated to this goal.
A wide range of reasons trigger consumers to consider buying a home.
- 26% of respondents were tired of living in their current home
- 17% of potential buyers consider favorable home prices as the trigger
- 16% of the home shoppers are motivated by a change of family circumstance and composition
Consumers vary significantly in product type preference.
- 56% of shoppers prefer single-family detached houses
- 24% prefer town houses, row houses or single family attached houses
- 8% consider condos as their preference.
Similarly, location also varies with the suburbs as the dominant stated preference. 50% of home shoppers prefer suburban areas (both closer-in and outlying suburban areas).
Consumers look for a variety of home attributes for their next homes. Our survey asked home shoppers to allocate 100 points across 20 key attributes of homes and neighborhoods. Overall, quality of construction, larger yard/lot space, and safer neighborhood are of utmost interest, with each earning an average allocation of 9 points.
Conversely, shoppers are least interested in houses with less space, being in an established neighborhood, or having mature trees and landscaping.
Homebuyers face many different impediments in their quest to buy a home. For people who have been seriously searching for more than three months, the top two impediments are that they haven’t found a house that meets their needs, and/or they can’t find a house within budget. With tight supply and lack of new construction, they have been the top impediments throughout the year.
But with a shift to more first-time buyers in the market this fall, there is an increasing trend of financing issues blocking people from getting a house. 24% of our September buyers responded that they lack funds for down payments, while 18% need to improve credit score. Affordability isn’t accessibility, even with favorable house prices; tight lending criteria hold consumers up to high standards in terms of down payment and credit score.