What are the main drivers in today’s home-buying decisions? Realtor.com surveyed recent house hunters through the BDX Home Shopper Insights Panel. According to the survey, here are the top reasons buyers identified as triggers to their decision to consider purchasing a home:
1. “I’m tired of my house”
That was the top reason identified, cited by 28 percent of the house hunters panel. The average time in a home has risen since the last recession as more owners found themselves underwater and faced price declines from 2007 to 2011. “After four years of above-average price appreciation, confidence in the market has returned,” notes Jonathan Smoke, realtor.com’s chief economist.
2. Interest rates are attractive
Interest rates were the second trigger buyers identified – 27 percent of shoppers listed it as a reason to act now. The average 30-year fixed-rate mortgage reached a low in January at 3.63 percent and continues to average under 4 percent. Last week, Freddie Mac reported the 30-year fixed-rate mortgage averaged 3.86 percent. That’s a big discount compared to the average monthly 30-year fixed conforming rate since 1971, which was 8.39 percent. “Compared to that, interest rates will certainly remain favorable for many months ahead,” Smoke says.
3. Home prices are favorable
In a 2012 realtor.com survey, 47 percent of active home shoppers cited favorable home prices as the top trigger for buying. That price motivation has been decreasing, but it still remains one of the top triggers. Today, just 26 percent of home shoppers cite favorable home prices as a reason for buying. In June, the U.S. surpassed its 2006 peak as home prices zoomed to a record high, but on an inflation-adjusted basis, home prices today are still about 20 percent beneath the peak at the height of the housing bubble, Smoke adds.
4. “I’ve got more money to spend”
Twenty-four percent of active homebuyers say an increase in income is their primary trigger for buying a home now. The 25- to 34-year-olds surveyed cited having more money to spend as the No. 1 motivator in buying. It was cited by 35 percent of the “older” millennials, Smoke says.
5. A change in family circumstances
Eighteen percent of homebuyers said a change in family circumstance or composition was their main reason for buying. More people are expanding their families: Births rose last year and are expected to grow again this year as well.
Source: “Here’s What Pushes People to Buy Homes in 2015,” realtor.com® (Oct. 1, 2015)
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