Consumer confidence around home buying has increased during COVID-19
A new survey on consumer sentiment about the real estate market shows buyers are surprisingly optimistic right now. More than 42,000 consumers across the nation participated in the survey, conducted by Meyers Research.
Respondents were represented all age groups, from people born before 1945 to 20-year-old Generation Zers. While COVID has hurt many aspects of life, one thing it hasn’t detracted from is consumers’ confidence in the real estate market. More than 70% of respondents surveyed said 2020 is a good time to buy. That’s an increase from Meyers’ 2019 survey, in which only 60% of respondents said it was a good time to buy.
Consumers gave many reasons why this is a good time to move, with many committing to the mantra, “real estate is never a bad investment.” Healthy home equity was the reason to buy for 64% of respondents, while 58% of respondents said they wanted to buy due to low interest rates. Another 54% of respondents said they wanted to buy because they have confidence in the market. However, even with an optimistic consumer base, there still are many reasons why people would refrain from buying a new home.
The most common reasons given were affordability (60%), inability to find the right property (51%) and a lack of confidence in the market (28%). The report also broke down homebuyers by age group and life stage (couples, singles, families). Millennials (born 1980-94) made up 38% of homebuyers, Gen X (1965-79) and Boomers (1945-64) tied at second and Gen Z (1994-2002) came in third, representing just 3% of buyers.
The Meyers team broke down respondents by their life stage into five groups, young families, mature families, young couples, mature couples and single people. They found the biggest buyers within these categories are young families, which make up 27% of buyers.
Mature families and couples each made up 21% of buyers in their respective groups, singles comprised 15% of homebuyers and young couples come in last, making up 12% of buyers. When asked their top reasons for buying a home, more than 80% of respondents said location is what they look at when buying, while another 72% said the design of the house was important to them.
Price was among the top reasons for another 65%; more than 30% said community amenities were important, 25% prioritized accessibility and 30% said general safety was their biggest concern. The survey also found that certain regions of the country are attracting specific demographic groups, many of whom are migrating from other areas. In general, states in the South across the country are attracting younger buyers, with the exception of Florida, which attracts more mature buyers. Northern states also tend to attract more mature buyers.
According to the survey, mature couples make up 40.6% of homebuyers, while in the South 44.25% of buyers are young families. However, it should be noted that 79% of homebuyers in the Southwest region (Arkansas, the Carolinas, Georgia, Tennessee, Louisiana, Alabama and Mississippi) are young families. Meanwhile, population in the Midwest continues to decline, as America’s economy shifts to a post-industrial model, and manufacturing and blue-collar jobs disappear.
“For those city economies that have not diversified, they really get hurt, they get pummeled, said University of Illinois at Urbana-Champaign Geography and Urban Planning Professor David Wilson in an interview with the Chicago Tribune. “And what does that mean to get pummeled?
People have a very difficult time living there and earning a living wage. They simply can’t make ends meet. And they become primed for thinking about leaving and trying to find something better.” This economic shift has affected Chicago, with the city’s population of 2.7 million staying roughly flat since … Read More
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