The Bank of America (BOA) released their Home Buyer Insights for 2016 with some interesting stats every real estate agent should know. From the words of the wise, experienced homeowner, to the hopes and dreams of the struggling millennial, here are six of the most interesting findings.
1. Overall Factors
For today’s home buyers there are four overall factors that are extremely important to them:
Floor Plan 60%
Square Footage 47%
As well, the most desirable home was clearly in the suburbs with 52% looking for the perfect suburban home versus 26% urban and 22% rural. 75% are looking for single-family homes.
2. Skipping the Starter Home
Today’s first time home buyers are skipping the starter home. Instead they are focusing on a home they can grow into and avoid having to buy and sell their first home. According to BOA’s report, 75% of those surveyed said they are looking for a home they can grow into versus the 25% who wanted a home that suits their current needs even if it means selling their home down the road. As well, 69% said they would rather save more now to buy a nicer home in the future compared to 31% who said they would rather just buy a starter home now.
3. Affordability and Debt
There has been much talk about the fact that millennials are holding off purchasing a home due to student debt. However, the BOA study found that although 32% of millennials have put off buying a home due to debt, 43% of Gen Xers have waited. Student debt has caused issues for millennials, however for Gen X they are faced with other issues including saving for retirement, saving for their children’s education and credit card debt. Overall, 34% of those surveyed said debt was holding them back from purchasing a home. When it comes to affordability, more than half of those surveyed (56%) said they did not feel they could afford to buy a home at this time.
4. Sacrifice for the Right Home
Of those who purchased a home in the past, 76% said they made sacrifices in order to buy the home they wanted. The most common thing current homeowners gave up was travel at 46%, very close to the 44% of first time buyers who said they would sacrifice travel in order to buy the right home. Surprisingly 51% of those who are considering buying a home now are willing to sacrifice a new car compared to those who have already purchased a home at 37%. Not surprisingly, only 17% were willing to sacrifice their desired location.
5. Emotion versus Finance
First time home buyers are still more motivated by emotion than they are by finance. 76% were looking for a home based on emotions compared to 63% who were considering financial factors. 57% of today’s homeowners associate home ownership with happiness and 52% cite wanting a place to call their own the reason they want to buy a home. 52% of experienced homeowners said that they wished they had known about the pride associated with home ownership, 46% about the sense of accomplishment and 46% about the joy owning a home would bring them. Only 26% said they wanted to buy a home because of saving enough money and 21% were ready as the felt they had a steady enough job.
6. Financing and Saving for a Home
Last but not least, today’s home buyer understands the importance of savings with 59% planning to set aside savings for down payments on their homes. 85% said they would appreciate a tool that would take money from their pay checks for automatic savings. 52% of experienced home buyers said they would tell their younger selves to start saving earlier. 92% said that not only saving for a home, but also paying off a home is important to them. Of the 66% of millennials expecting support from their parents, financially or otherwise 70% felt an obligation to involve their parents in the home buying process. Parental input ranged from how much to spend (44%) to where to buy (38%) as well as having a final say in the home they should purchase (28%).
Despite the challenges, many people feel home ownership is still their ultimate dream, even if they have to save more and wait a little longer to make it a reality.