April 6, Bank of America issued the results of an online survey it conducted with over 1,000 respondents falling into all the age categories. Called the Homeowner Insights Report, the results show some surprising facts about the impulses that motivate prospective homeowners and govern the choices they make. For those of us in the business of selling real estate, it makes interesting reading and gives us a better idea of how we can tailor our presentations to produce better outcomes.
The study paints a portrait of a sensible future homeowner who has a strong desire to own his/her own home. This is clearly an emotional decision, say 76 percent of respondents, and it is motivated by the wish to have a home on one’s own (52 percent), something he/she has always desired (43 percent) and is part of the impulse to lay down roots in a community and achieve stability (31 percent).
The desire to own is so strong that people are willing to sacrifice other purchases to make home ownership possible. These sacrifices include a new wardrobe (54 percent); a new car (51 percent); and many of the perks of a social life, like dining out (50 percent). Respondents also say that they are willing to forgo a vacation to make the dream of home ownership possible (44 percent).
When it comes to what kind of home to buy, we learn that first and foremost cost is the determining factor (82 percent). After affordability, location ranks as most significant (71 percent), followed by desirability of the floor plan (60 percent) and size (47 percent). Single family homes are preferred by the majority of prospective buyers, and though many young people prefer an urban environment, the suburban lifestyle is still compelling; a majority of 54 percent search in the suburbs for their home.
One would think that the starter home, the most economical choice, would be preferred by folks just entering the market, but in fact, a smarter perspective has the day. 75 percent say they would prefer to wait and save funds to enable the purchase of a better located and more desirable property. The decision to wait is determined by four factors: 56 percent say that they cannot afford or don’t have the down payment required to purchase; 34 percent prefer to pay off debt before looking while over 50 percent said they either did not need a home or they felt this was not an advantageous time to enter the market.
How to accomplish a purchase? Especially for millennials (aged 18-34) assistance from mom and pop was called for, in one way or another. 66 percent found they needed help either with funds, for the down payment or mortgage relief, or in decision-making and moving. Of the people sampled, a remarkable 73 percent claimed they were able to stick to budget, with12 percent actually paying less, and only 23 percent more than they had anticipated.
In summary, the survey tells us that the desire to own one’s own home is alive and well, and that most people treat this as the serious decision it is. Maybe all the recent past news of folks being underwater and losing their homes to foreclosure and buying above their means generally put a scare into the populace. Good sensible choices seem to be the new trend. Good news for all.
