Homeownership remains a priority for younger consumers despite tight housing inventory and stiff competition for homes – conditions that are driving up prices in many markets.
In Berkshire Hathaway HomeServices’ latest Homeowner Sentiment Survey released today, a full 71% of prospective homeowners – a demographic composed largely of Millennials – believe now is a good time to buy a home and 63% remain steadfast in their ideal preferences for a home.
Despite concerns over shrinking inventory and tough competition, prospective homebuyers are still optimistic about the market.
- Despite inventory shortages, Millennials recognize the benefits of entering the market, but still want to wait to find their dream home.
o 71% of prospective homebuyers – a demographic composed largely of millennials – believe now is a good time to buy.
o 63% of prospective homeowners say they are unwilling to compromise on their ideal preferences in their search for their dream home.
o 76% of Millennial prospective homeowners worry they will overpay for a home and 76% believe that finding a competitive-priced home is more challenging than ever before.
Key Takeaway:
o Finding the right agent partner is a key step prospective homebuyers can take to ensure they have the best shot of finding their dream home.
- Even as home values increase, Boomers are still reluctant to sell their homes – a contributing factor to the current inventory shortage.
o Four in five Boomers indicated they would rather not go through the hassle of shopping for another property.
o Over 70% of Boomers say they are hesitant to list their homes because home values are rising.
Key Takeaway:
o Despite Boomers’ reluctance to sell, rising home prices will provide them with greater flexibility to downsize or move to new locations for retirement – a key factor that may help ease inventory conditions.
As prospective homebuyers face market challenges, many are willing to leverage creative techniques to gain a competitive edge in placing an offer.
- As competition remains tight for good homes in many markets, homebuyers are becoming more creative to stand apart.
- Across all generations, prospective homeowners are more willing to utilize unique techniques to help them close on the home of their dreams:
- 45% of prospective homeowners said they would be willing to cover closing costs.
- 36% of Millennials said they would be willing to send a customized letter to sellers.
- 58% of Millennials said that they would be willing to put down more of an earnest deposit to show their commitment.
- 31% of Millennials said they would be willing to offer a bid over the asking price to secure their dream home.
Prospective homeowners are becoming more familiar with the home-buying process, increasing their favorability of the market.
- Favorability in the market remains high with 72% of current homeowners having a positive feeling toward the real estate market.
o Among current homeowners, lower interest rates (51%) and increased appreciation of real estate (44%) were the main factors contributing to the favorability.
- Respondents also reported an increased knowledge of mortgage rates, with 61% of prospective and 63% of current homeowners say they are more aware of current rates, jumps of 2 and 4 percentage points from the spring survey, respectively.
