Last week, we launched a 3-part series dedicated to exploring the "Rural-Urban Divide" in how Americans view home buying differently. It appears – based on ValueInsured’s Modern Homebuyer Survey data accumulated over the past 18 months among over 6,900 homeowners, buyers and renters – Americans universally value the importance of homeownership. However, the shared value seems to end there among people who reside in hometowns of different sizes.
There are many facets along the home-buying attitudinal dimensions where urban, suburban and rural Americans diverge in their beliefs. Some of these include the perceived investment benefits of buying a home, confidence in the housing market, expectation for a housing bubble in the near term, planned length of homeownership, desired attributes in a mortgage lender, etc. The list goes on. But one of the areas that surprised this research team is the strength of the family among urban homebuyers. Let us explain…
It is often presumed that the family structure tends to break down in urban areas, or at least weakens when compared to in rural areas where more extended family members tend to live closer together and rely more on each other. So it was a surprise when findings in ValueInsured’s quarterly survey seem to indicate urban Americans are more reliant on their family for home-buying decisions. According to the latest survey conducted in Spring 2017:
- Survey respondents who live in urban areas are more likely to count on family when planning how to fund a down payment for their upcoming home purchase. 21% or urban Americans plan to source part or all of their down payment from a gift from family, compared to 12% of suburbanites and 8% of rural area respondents who plan the same.
- Consistently, urban homebuyers are also more likely to expect parents to help adult children financially with a home purchase. 3 out of 4 (75%) surveyed homebuyers in urban areas believe it is a “natural or acceptable responsibility” for parents to help their adult children financially with buying a home. In comparison, only 51% suburbanites and 41% rural homebuyers believe the same.
- 76% of urbanites say, as parents, they have helped or plan to help their own children financially with buying a home, while just 50% of suburbanites and 41% of rural respondents say the same.
- We were curious if the family generosity is a one-way street or if adult children are also expected to help parents with home buying. Interestingly, the family ties are again stronger among urban respondents. 60% urbanites believe adult children should help their parents financially with a home purchase, while only 21% of suburbanites and 20% of rural respondents believe the same.
- 71% of urban respondents believe it is an adult child’s responsibility to provide shelter for an elderly parent, while 48% suburban and 41% rural respondents believe the same.
Based on data above, it would appear that the family bond is stronger among urban homebuyers. However, there are some caveats. Not surprisingly, the average age of urban homebuyers and renters who participate on ValueInsured’s survey is noticeably younger – at 38.4 years old. It is possible these respondents are more idealistic about helping their parents in the more distant future. These younger urbanites probably have fewer financial obligations compared to the survey’s average suburban respondent, who is nearly a decade older at age 47.8, and is more likely to be member of the sandwiched generation with more competingfinancial concerns.
Not only are the survey’s urban respondents younger, they are also more likely to self-identify as new immigrants. The combination of younger average age, more likely immigrant status, and higher home prices may have contributed to the urban respondents’ stronger expressed financial reliance on their family to buy a home.
While more urbanites say they plan to take care of sheltering their parents in the future, according to their self-reports, currently more suburbanites (7%) and rural respondents (9%) actually live with their parents or other relatives (not counting a spouse or a child) than urbanites do (3%).