Young buyers see value of homeownership; tired of renting

PAR’s newest Welcome Home survey shows that a third of Pennsylvania homebuyers bought their homes predominantly because they wanted to buy a home, not because they had to look for a home. The survey, performed by Keystone Analytics^®, revealed that 32 percent of homeowners decided to buy a home because of a desire to relocate or they were tired of renting. The remainder of respondents had unique reasons or were pushed to find a new home due to circumstances like family changes.

It’s not surprising that we see buyers in the 18-34 age range who cited being tired of renting as the main reason they wanted to buy a home. As Realtors®, we know that owning a home helps build wealth and national surveys show that younger buyers see a value in owning property.

This is the fourth Welcome Home survey conducted for PAR and we’re seeing this 30-35 percent share of homebuyers has held fairly steady over the last year. It’s one of the exciting things about this survey – reviewing the results to see how consumers’ views are changing.

What we did find a little surprising in this survey is that 11 percent of 18-34 year-old buyers indicated that they purchased an investment property or a second home. We’ll continue to watch this in future surveys to see if this may be an emerging market for this part of the industry. You may also consider sharing property investment opportunities with younger buyers who you previously may not have been on your radar.

Our survey showed that cash purchases and 30-year mortgages continue to be the most popular way to finance a home. Forty-one percent of those responding chose a 30-year mortgage to purchase a home. Twenty-one percent of all respondents surveyed reported buying their home in cash as well.

Cash purchases are even more common with senior homebuyers, with 36 percent of those over age 65 reporting they purchased their new home just with cash. Federal Housing Administration loans, adjustable rate mortgages and 15-year mortgages are less popular with homebuyers.

Ten percent of those surveyed said choosing the right home to purchase can also be a stressful part of the process. It’s important for us to help buyers carefully consider what they deem most important in choosing a home, distance from work, amenities, etc.

Financing and closing issues continue to be the most stressful part of the homebuying process, with 21 percent citing financing questions and six percent saying closing issues were the most stressful. I’ve been using this information and working to outline the lending process and closing issues so my clients better understand the overall transaction.

The Welcome Home survey shows a continued competition between realtor.com® and other online home search companies. Homeowners aged 35-49 are twice as likely as homeowners under age 35 to use realtor.com®, while about a third of homeowners under 50 are still not using home search sites at all.

The Welcome Home surveys are conducted on a quarterly basis for PAR and provide information on a number of consumer homebuying trends. More survey results are available online at WelcomeHomePA.org.