Below is a great summary of why people are planning to buy houses in the next five years.
However, and this is a big HOWEVER, there is a huge implication in a slightly different context, which is this.
When over half of Americans plan on buying a house, that will deplete housing inventories even more than what has already happened. When demand goes up ( and 50% planning to buy is demand going up) and supply goes down, prices will be going up.
In our area, Delco, Chesco, Montco, prices have not increased a lot, YET. Plus interest rates are still at record low levels.
Lesson is, now is the time to make that move. If you wait even a few months, chances are it will cost you a lot more.
According to the BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said that they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also included other interesting revelations.
Those Looking to Buy
- 74% of those looking to buy a new home will consult with a real estate agent
- 59% said they will visit online real estate websites
- 37% will seek recommendations from friends and family
- 78% plan to get pre-approved before seriously searching for a home
Those Who Already Own
- 75% of current homeowners set a budget before looking for a home, and 16% ended up spending less while 13% went over their budget.
- 63% of American homeowners spent under six months looking for a new home before they made a purchase.
- 8% bought their home without participating in an active real estate search – or even any plan to buy at all – because a specific property caught their attention.
The last point is very interesting: Of those who purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.
Why Are More People Not Planning Their Next Move?
Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? An article by Fannie Mae reveals evidence that a large number of homeowners are dramatically underestimating the equity they have in their current home. The report explains that:
“Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”
Perhaps it is time to sit with a real estate professional to determine the actual equity you have in your house and to take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.
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