The good people over at Realtor.com published the findings of their yearly Active Home Shopper Survey toward the end of 2016. It has tons of interesting insights, which come directly from the minds of active home shoppers — AKA soon to be home buyers. So the people currently trying to buy a first home, or a new home, tell us exactly what they are looking for.
- Which features are most important to them?
- What motivated them to pursue a new home at this moment in time?
- What are their biggest limitations to buying a home?
- Plus much more…like location preferences and how buyer demographics are changing rapidly.
If you’re a current or aspiring house hunter, see which answers they gave that you agree or disagree with. Comment down below and tell me how you stack up against the opinions of home buyers in this survey.
The Top 10
#1) A Lot More First Time Home Buyers
This year’s survey shows a significant increase in the number of first time home buyers in the market. In the previous year’s survey the percentage of active home shoppers who identified themselves as first time home buyers was 33%. And in just one year, that number has shot up to 52%. So more than half the house hunters out there right now have never owned a home before. With an increase like that, you have to think that there may be a new generation of buyers entering the housing market. While the economy is obviously a driving factor in home purchases, this staggering increase in first time home buyers certainly suggests that there’s more at play than just economics. Specifically, changing demographics.
Put an ear to the ground because a generational force of nature is coming — Hurricane Millennial. And they are going to make their presence felt. But we’ll talk more about Millennials soon…
#2) Hurricane Millennial
So about those Millennials — the survey give us another pretty amazing statistic to help us see how things are changing. From #1 above, we know that 52% of buyers self identified as first time home buyers. Now let’s take the data to the next level. Of that group of first time home buyers, 61% of them are Millennials! And just to clarify, Millennials means people under the age of 35. It’s the older Millennials in that group that actually dominate…making up 33% of ALL active home shoppers! Think of the impact this new generation will have on the housing market in the coming years. “This represents an ‘oh shift’ moment in housing,” said Jonathan Smoke, chief economist for realtor.com®.
#3) First Time Home Buyers Want…
First time buyers are looking for homes that will suit their immediate and growing families. They’re looking for privacy, and put a lot of stock into safe neighborhoods with plenty of living space. With that list of wants, it’s not surprising that lots of first timers prefer a home in the “outlying suburbs” or “suburban areas near urban centers”. They are looking for single family homes, first and foremost. But some of the Millennial first time home buyers are also shopping for townhouses or row homes. The fact that Millennials differ in this area suggests that they are prioritizing location and staying on budget, over more expensive single family homes.
#4) What’s Holding You Back?
We all have different obstacles in our lives. So here’s a few of the top concerns cited by the active home shoppers in the survey. In my opinion the top 2 answers sound more like excuses rather than actual impediments, so we’ll skim over those. Number one being “Just starting to explore”, and number two being “Have not yet found a house that meets my needs. So beyond those items, what else are home buyers worried about? “Cannot find a good house in my budget range” is especially relevant for shoppers aged 35-44. This is most likely because they are typically move-up buyers, people with growing families, or families trying to move into a ‘better’ neighborhood. These can all be costly must-haves during a house hunt. And last but not least, “Lacking enough funds for a down payment” came in 4th. However, it was the #2 obstacle cited by Millennials. If you’re in that same boat, please give me a call because I specialize in home buyer programs that can seriously improve affordability — including the NHF cash grant, which is a great option when dealing with down payment issues.
#5) Favorite Features
Let’s talk a little bit more about the main features that active home shoppers are putting at the top of their list. We already mentioned safe neighborhoods and plenty of living space as a couple of the top features shoppers are looking for. But what other features are in demand right now? Perhaps surprisingly, the number 1 response to this question was: “Quality of construction”. The second most popular answer was “homes with larger yards and/or more space between houses“. Additionally, here are some of the other common responses. “Lower cost per square foot” (i.e. more house for your money), “proximity to good schools“, “convenient to work”, and “energy efficient“. I’ll go out on a limb and assume that the last one about energy efficiency is probably a more popular answer amongst Millennials. Another generational shift in the making.