Prices reaching all-time highs, historically low inventory, and Olympic-level competition among buyers. These are a few of the themes that have been dominating the housing market for the past two years during the pandemic. Real estate professionals have spent a lot of their energy tracking these trends, and a recent survey conducted by real estate tech platform HomeLight did a great job breaking them down for us. The survey examined 1,600 participants across the country who bought or sold a home in the last year and focused on many of the anxieties they faced during the process.
One fear surrounding the return of inventory is whether or not sellers will enter the market when many know they may also need to complete as a buyer later. There may not be any reason to worry about this issue though, at least according to HomeLight’s survey. Thirty percent of homeowners stated the reason they decided to sell was because they found a better home, while 24 percent stated rising prices as their primary reason for listing their homes. This was followed by 20 percent citing retirement as their primary reason.
In fact, the study states, “50 percent of sellers in the past year sold their home after living in it for five years or less”. The lion’s share (36 percent) considered selling for only 4-6 months before putting their home up for sale. Meanwhile, 10 percent of sellers sold their homes without knowing where they would move to, and 9 percent planned to stay with friends and family while they searched for a new home. Was it because they were so eager to cash out? In addition, 36 percent of sellers had already purchased their next home and 33 percent were in the process of finding or purchasing a new home.
What about the buyer’s struggle?
Unfortunately, 70 percent of buyer’s had at least one regret about their experience buying a home. Not surprising when you see that 80 percent had to compromise on key features and 78 percent had to alter their approach because of steep competition.
How did homebuyer’s cope with the competitive marketplace?
- 31 percent bought their home with cash
- 23 percent changed the closing timeline to fit the seller’s needs
- 22 percent put down extra funds, beyond the expected down payment
- Another 22 percent didn’t request any repairs
- And 15 percent removed contingencies
Just how expensive was buying a home in this market?
Thirty-five percent of buyers who increased their down payment did so by 6 to 20 percent of the total purchase price. Of those that used a mortgage to purchase, 43 percent said finding a home in their budget was challenging and 28 percent stated it was a significant obstacle. It wasn’t just the search that was challenging either, it would stand to reason that saving for the down payment would add its own difficulties. Nearly 30 percent of buyers said saving for that down payment was challenging and another 30 percent said just qualifying for the mortgage was a challenge.
Data solutions to give your business an edge
It’s no secret that the past two years have been difficult for prospective home buyers, and if you’d like to continue reading what this study found, you can do so here. For those interested in watching current market trends and data as it unfolds, The Warren Group’s Data Solutions are what you need. Access the industries most up-to-date and reliable data for real-time monitoring with National Data Licensing, our Mortgage MarketShare and Loan Originator modules, and a multitude of other data solutions to fit your every need. Reach out to a data specialist today to ask about data that will help your business grow and make your team stand out among the competition.