The Zillow Group Consumer Housing Trends Report uncovers some interesting insight into preferences and feelings about homeownership in America, as well as challenges facing those in the housing market. Whether you are planning to buy or sell a home, or assist a client in doing so, this research could help you gain the edge you need to achieve your goals. Here’s a brief snapshot of the findings!
Attitudes Toward Homeownership
Owning a home continues to be an integral part of the American dream. Zillow found that, “As an emotional milestone, a symbol of comfort and security, or a vehicle for financial wealth, home is top of mind for Americans.”
Homeowners view their home as both a financial investment (52 percent) and a reflection of who they are personally (48 percent).
Zillow reported that despite the added costs of homeownership (insurance, utilities, taxes, etc.), if a buyer can overcome the hurdle of the initial down payment, in some regions, a monthly mortgage payment could be more affordable overall than monthly rent. This financial comparison is prompting renters to consider homeownership. Half of renters consider buying instead. More than half of all renters (57 percent) said a rent increase impacted their decision to move.
Homeownership seems to bring with it some sense of permanency. Eighty-six percent of homeowners said they have no plans to sell within the next three years. When it comes time to move, 57 percent of buyers purchase a house within the same city, including 17 percent who don’t even leave their neighborhood.
Saving for a down payment ranks high among challenges across all generations. Especially for those paying higher and higher rents while they search for a home. Zillow reports that only a quarter (24 percent) of buyers put 20 percent down on their home.
Pro Tip: Ask your loan advisor about low down payment financing options and programs for first time homebuyers.
Tight inventory continues to be a problem as well. Across the United States, the number of homes available for sale has fallen year-over-year every month since February 2015– leaving fewer homes for buyers to choose from and, in turn, stiffening competition for homes that are available.
Pro Tip: One way to gain an edge over the competition is to shop for a home with a loan already approved. RPM’s Advance Approval program goes beyond pre-approval to provide clients with full loan approval allowing them to make offers that are as competitive as all cash.
Being in a safe neighborhood is a top priority for almost all homebuyers. Seventy-eight percent of suburban buyers require this characteristic, compared to 59 percent of urban buyers and 70 percent of rural buyers.
There is a trend towards upsizing and a desire for more living space. The typical buyer is upgrading—both in size (usually by 200 square feet) and in price (typically by $5,000). When transitioning from renter to homeowner, the typical buyer adds one bedroom and 400 square feet to their home.
Features listed as highly desirable show increasing trends toward sustainability and customization. Forty-eight percent of buyers list energy efficiency and preferred style of kitchen as desired home characteristics. Preferred finishes (e.g., flooring, countertops and appliances) follow closely at 47 percent.
Over half (52 percent) of buyers consider new construction homes, and 36 percent consider other types of nontraditional for-sale homes, such as foreclosures (36 percent) and short-sale homes (34 percent).
The more you know about the market, the better prepared you will be to make informed, smart decisions. Not sure where to begin? Check out the Wins section of our website to see how we are partnering with clients to help them achieve their goals. Then, connect with a loan advisor to get started…and win in the housing market!