As the busiest homebuying season of the year gets under way, potential buyers are poised to get off the sidelines and enter the market.
According to Chase’s national survey “Insights: From the Mind of the Homebuyer”, potential home buyers say they aren’t concerned about navigating the home-buying process, but a deeper look shows that their anxiety about the homebuying process is high. In fact, interested buyers are considerably more anxious about the buying process (70%) than they are about getting a root canal (64 %) or public speaking (62 %).
Homebuyers are optimistic that it’s a good time to buy but they anticipate challenges. Besides interest rates, Chase’s survey found that interested buyers are concerned about finding the home they want within their budget. Three out of four buyers are worrying about beating out the competition to get it.
Only one in four interested buyers correctly answered a series of questions about home buying, including how annual percentage rates work, how much should they put down for down payment, and how credit scores work.
The majority of interested buyers (62%) think that now is a better time to purchase a home compared to last year and plan to purchase the new home in the next 18 months. Top reasons they want to buy now include rising rental costs and historically low interest rates.
Whether shifting from renting to buying, or upgrading from their current home, potential homebuyers want to make a move before interest rates begin to rise, as some analysts predict.
As for their motivations for buying, 32% attribute it to current low mortgage rates. Another 35 percent said if 30-year fixed mortgage rates were to rise above 4%, it would delay their purchase. An additional 20 percent said upgrading from their current home was their motivation for buying.
The survey also revealed insights into homebuyers’ concerns and challenges.
The majority of potential homebuyers are concerned about finding a home that fits within their price range (56%) and that’s located in a quality neighborhood (56%). Buyers are clearly worried about housing inventory and rising prices, especially during the competitive spring buying season,” But the research also shows that interested buyers are optimistic and ready to act on their goals.
Quick stats from the “Insights From the Mind of the Homebuyer” survey:
- 43 percent of potential home buyers feel that getting a mortgage will be easier this year.
- 56 percent say they are concerned about finding a home that fits within their budget and that’s located in a quality neighbourhood.
- 32 percent want to buy soon in order to take advantage of low rates;
- 35 percent say that 30-year fixed mortgage interest rates rising above 4 percent would delay their decision to buy
- 20 percent say the rising cost of rent is their number-one reason to buy
- 20 percent say the desire to make an upgrade from their current home was their top reason to buy
- 70 percent of those surveyed said they thought they may have missed their opportunity to buy already, as home prices are increasing.
- 3 out of 4 homebuyers are concerned their offer will be outbid by others
- 73 percent said they’d give up things like eating out and taking vacations in order to buy their dream home.”
- 42 percent say they aren’t at all concerned about lacking understanding of the mortgage process.
In addition, the survey revealed tensions among homebuying couples:
One-third of homebuying couples have been bickering with their partner during the process. One reason for the spats may be the budget.
Men and women differed in their feelings on how important it is to stick to the budget; about half of women (49 percent) say they are more conservative than their partner and don’t want to go beyond their agreed-upon budget, while 39 percent of men say they are less conservative than their partner and are willing to push their budget limit to get the home they want.