LendingTree Survey: Financial Benefits of Homeownership and Housing Affordability Motivate Potential Homebuyers
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Interestingly, 72% of home buyers residing in the western
"The housing market is stabilizing and financing is becoming more available for potential home buyers," said
Outlook on Household Finances
Active home seekers (80%) are more optimistic about their households' financial condition 12 months from now, compared to casual home seekers (70%). Less active home seekers cited they require more confidence in their household financial situations before home ownership moves into sharper focus. Forty-three percent (43%) of less active homebuyers cited improvement in household economic conditions (23%) and the need to save for a down payment (20%) as their top two reasons for being less committed to home purchase at this time. Additionally, 27% of experienced homeowners stated their top reason for the casual pursuit of a home at this time is they need to sell their current home.
Mortgage Process and Loan Preferences
The guiding attribute in future mortgage applications is affordability. When asked what percentage of the home purchase price did you put down or expect to put down when you find the home you want, forty-four percent of home seekers expect to put down less than 15% of the home purchase price, 37% expect to put down from 15-24%, and 19% will put down greater than 25%. The preferred type of mortgage sought by homebuyers is the fixed rate mortgage. As for expected loan type, 45% of home seekers expect to apply for a 30-year fixed rate mortgage, 36% a 15-year fixed rate mortgage, only 7% will seek an adjustable rate mortgage, with 12% of respondents unsure of their loan preference.
Shopping around for a mortgage is deemed worthwhile by most home buyers with 66% of homebuyers believing the variance in rates is 25bps to 75bps across lenders. Additionally, 49% percent of respondents claim they would apply the money saved on a mortgage payment towards debt reduction and they cite mortgage brokers as the most influential source for mortgage-related information, followed by the Internet and real estate brokers.
Time consuming paperwork is considered the most annoying aspect of the home buying process for 31% of respondents. Uncertainty about the fairness of their mortgage rate (30%) is tied with complexity of terms (30%) for the top causes of frustration in shopping for a mortgage. A lack of knowledge about mortgages and complexity of the terms bothered first time buyers.
Homebuying Motivators
Financial and habitat circumstances are motivating home shoppers to become homebuyers. Approximately 42% of potential homebuyers cited the financial benefits of owning versus renting as a main driver for their decision to buy while 32% said they needed more space to accommodate growing families. Other reasons for seeking a home include upgrading to better neighborhoods (32%), relocating (24%), downsizing for affordability (10%) or downsizing because of empty-nester status (9%).
Among casual homebuyers and those intending to start searching for a home within 12 months, 23% are waiting for their household's economic situation to improve and another 20% have to save more money for a down payment. These are their single largest hurdles to overcome before they can become more committed homebuyers.
About the Survey
Survey results are based on 600 individuals who are considering purchasing a home within the next 12 months. These potential homebuyers participated in an online survey conducted by
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SOURCE
News Provided by Acquire Media