Rising sea levels vs economics…American homebuyers share their biggest external risk factors

Owning a home is still fashionable. Nearly 8 in 10 Americans (79%) believe owning a home is an important part of their American Dream; 78% of non-homeowners would like to one day buy a home. Yet, there are personal roadblocks that could deter or delay homeownership. We have all heard student loan debt is one of the top challenges that delays first-time home buying. And affordability and the ability to save for a down payment in particular is the most often cited challenges faced by would-be homebuyers. 

But how about other external risk factors beyond a homebuyer’s control? Do homebuyers consider environmental risks, such as earthquakes, rising sea levels, or national security concerns when they consider buying a home? Apparently, yes, they worry about these external risk factors; but it appears for the most part, homebuyers are not deterred by them.

In the latest quarterly ValueInsured Modern Homebuyer Survey, conducted in July 2017 among a nationally representative sample of homeowners and interested homebuyers, Americans shared what external risk factors they consider when they buy a home.

Among American adults of all age groups, the top 5 areas of concerns are:

  1. The U.S. economy (56% concerned about this risk factor when considering buying a home)
  2. Another housing crisis (53%)
  3. A potential job loss or job move (49%)
  4. The global economy (48%)
  5. National security or terrorism (43%)

Among Millennials, the top 5 areas of concerns are:

  1. A potential job loss or job move (64%)
  2. The U.S. economy (63%)
  3. Another housing crisis (61%)
  4. The global economy (60%)
  5. Environmental risks, e.g., rising sea levels, earthquakes (51%)

ValueInsured’s survey revealed some interesting generational and regional differences when it comes to what homebuyers are concerned about. More than twice as many Millennials and Gen-Xers (51%) express concerns over environmental risks compared to Baby Boomers. Millennials also appear to worry more in general compared to older homebuyers, or at least they are more likely to express concerns when answering a survey. Not surprisingly, respondents in coastal states – for example in California and New York – express more concerns over environmental risks when they consider buying a home. New Yorkers, who might have had a higher share among those affected by the 2008 housing crisis, also expressed the highest levels of concern over another housing crisis and a potential job loss or job move as a top risk factor for buying a home. 

It is worth noting that concerns over our country’s economy among homebuyers have gradually declined every quarter in ValueInsured’s survey over the past 18 months. Homebuyers’ concerns over national security or terrorism was highest in the survey immediately following the Orlando Pulse nightclub attack in June 2016, and had since gradually declined in every quarterly survey, until a recent jump in the July survey. Now, 43% of all Americans say they “worry about our national security or terrorism” when they consider buying a home, up 4 percentage points from April 2017. 

There you have it. Homebuyers appear to have many worries; and why wouldn’t they when the largest personal investment they will likely make is on the line. However, it does not appear these external risk factors are enough to diminish Americans’ desire to become proud homeowners. What it does suggest, however, is that American homebuyers – especially among the younger generation – are increasingly savvy, and appear to carefully consider their options, benefits and risk factors when they make such a large personal and financial decision. And that seems to be a trend none of us should worry about.