The Top Reason People Are Buying Homes Is Because They’re Sick of Their Existing Ones

October 5, 2015 No Comments »
The Top Reason People Are Buying Homes Is Because They’re Sick of Their Existing Ones

When you think of why people move, the first reason that comes to mind might be because of a new job, or maybe due to a growing family.

But apparently that’s not the main reason these days. Instead, people are buying homes simply because they’re sick and tired of their current digs.

At least, that’s what the BDX Home Shopper Insights Panel survey, commissioned by Realtor.com, came up with.

The survey asked active home shoppers during the months of June and July why they were, well, actively shopping. And the number one reason was being “tired of my house.”

It was the top pick from 22 possible responses, cited by more than a quarter (28%) of home shoppers.

Per the Realtors, this is a “strong indicator of pent-up demand,” though maybe it’s just a sign of the times.

And by that, I mean many homeowners finally have the ability once again to list their home and shop for another. Why? Because they’ve gained lots of home equity over the past few years.

This in turn has allowed them to move, even if they wanted to move back in 2008, 2009, and so on.

The big problem in my eyes is that these folks will probably just buy another overpriced home, though hopefully won’t land in an underwater position again anytime soon thanks to higher down payment requirements.

Well, that’s if they don’t go with an FHA loan or put down just 3% via Fannie and Freddie. Healthy competition may well dictate the down payment here as sellers go with those who can come up with more.

Low Rates Are Still Motivating Folks

The second best reason to move these days is to take advantage of those low mortgage rates. It was cited by 27% of home shoppers in the survey.

It makes sense; mortgage rates are still super reasonable, especially historically. In the latest week, the average rate on a 30-year fixed per Freddie Mac’s survey was 3.85%.

Consider that it has averaged 8.39% if you look all the way back to 1971, though of course there have been many ups and downs along the way.

It could in fact be a good reason to buy a home, though you should remember the price you’re paying as well. It might not be as amazing as you think.

Perhaps more amazing is that 26% of home shoppers still think home prices are favorable, making it the third most common reason to order a moving van.

I guess it depends where you live in the country; I’m guessing these responses didn’t come from California or Denver or any other hotspot nationwide.

Yes, existing home prices hit a nominal record (not inflation adjusted) in June, but remain around 20% below peak levels if you factor in inflation.

However, this response was a lot more popular in 2012, when it was number one with 47% of active home shoppers.

So it’s clear that the recent home price increases have affected a lot of shoppers, though they haven’t rocketed completely out of reach just yet.

[It’s Not Cheaper to Own Than Rent?]

Millennials Have More Moolah

Another 24% of respondents cited having more cash on hand to buy a house. I suppose this is good news because it means the economy is improving.

If you filter only the 25 to 34 year-olds, this is the top response with 35% citing it, meaning older Millennials are beginning to feel confident about settling down, despite recent reports questioning if they wanted to buy homes at all (or cars for that matter).

I guess you’ll have to question where they want to buy these homes. In the city or the suburbs or both?

Rounding out the top five was a change in family circumstance/composition, aka a baby boy or girl.

A healthy 18% of shoppers cited this as a reason to move, perhaps from a condo to a home, or simply from a starter home to a larger one.

The Realtors expect this number to increase as the housing market continues to normalize.

Read more: Is it a good time to rent or buy a home?

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