By Kerry Smith
Survey: Most would-be buyers (55%) know it’s a really tough market right now, but a majority (54%) still plan to maintain current goals or speed up the buying process.
CHARLOTTE, N.C. – Many hopeful homebuyers – especially those in their 40s and younger – are forging ahead with plans to buy homes despite believing the market favors sellers, according to Bank of America’s 2023 Homebuyer Insights Report.
More than half of prospective homebuyers surveyed (55%) believe the market is more competitive than last year – but just as many (54%) plan to either speed up their home purchases or buy when they originally planned.
The percentage is even greater for younger generations: 62% of Gen Z and 55% of millennials.
However, not all want-to-be buyers plan to stay in the market, at least not now. Two in five (39%) believe it’s a seller’s market, while 18% say it’s a buyer’s market and 31% say it’s neither.
Current challenges cited by buyers
High prices and interest rates (51%)
A lack of cash reserves for down payments (37%)
A low credit score (37%)
Still, nearly 40% of those prospective homebuyers said they feel more confident in their ability to buy a home today versus last year, compared to 26% who are less confident and 28% who feel about the same.
“The market is less frenzied as rates have moderated, and that may be impacting perception,” says Matt Vernon, head of retail lending at Bank of America. “And low inventory is still creating a highly competitive environment. Homebuyers are doing the right thing by taking time to understand the market, weigh their priorities and determine what fits into their budgets.”
The motivation for many buyers? Financial security. Homeownership has historically helped families build long term-wealth.
A majority (56%) of Gen Z and the same percentage of millennial homebuyers plan to purchase in the next two years – nearly on par with Gen X (58%).
Nearly half (47%) of all prospective buyers say they’d buy a home in the current housing market because they’re tired of renting and of rent increases; 28% want to start building equity.
Inactive homebuyers still curious
Even hopeful buyers waiting for the housing market to cool are forging ahead in their own way, according to the study: More than two-thirds (67%) still actively look at homes for sale, either scrolling through a real estate app (52%) and/or visiting open houses (31%).
Those scanning for homes find it to be an enjoyable pastime (41%), a way to dream about their future home (37%) and a window into how others have decorated their spaces (32%).
Beyond simply looking for inspiration, two-thirds (65%) of those who scroll through listings are interested in what their current budget would get them if they were to buy today.
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