In ValueInsured’s Q4 2018 Modern Homebuyer Survey, starter-homeowners who expressed strong interest in selling and buying another home were asked to list factors that keep them from “pulling the trigger now.” The results are interesting, especially when considering the overall positive economy we have.
According to NAR, over 65% of all U.S. homes sold in 2016 went to repeat homebuyers. So why do we constantly see more spotlights on first-time homebuyers? For starters (no pun intended), the decline in overall homeownership rate has been largely attributed to first-time homebuyers, whose share of total buyers dropped to a near-30 year low in 2014. Secondly, it is presumed, rightly so, that the entrance of first-time buyers helps expand the overall U.S. housing market, as buyers typically don’t go back to renting by choice once they have owned their first home.
However, as the industry encourages more first-time buyers to convert to homeownership, it is important to remember that without repeat homebuyers who upgrade to bigger, more expensive homes, starter home inventory cannot be freed up for first-time buyers, and the market size would stay stagnant. It has been reported that home sales this Spring has been slowed by low inventory; and one key reason for the shortage is would-be sellers holding onto their current homes, concerned that they may not be able to find desirable homes to upgrade to. In other words, it is not far-fetched to say that not only are repeat buyers responsible for two-thirds of all home sales, they have a hand in helping close the other one-third as well.
In our latest ValueInsured Modern Homebuyer Survey, we learned that most prospective first-time and upgrade homebuyers will buy sooner, if they could be given more confidence about the housing market, and about their odds of preserving their down payment savings. We interviewed 1,013 Americans who were interested in buying a home, and this is what they told us