Affordability is a major issue when it comes to home buying, according to a recently released national study.
The real estate firm Redfin released its most recent Homebuyer Survey, and the main findings were related to affordability when it came to looking at new homes. Redfin surveyed more than 1,800 homebuyers across the United States in August to come to its conclusions.
The findings also found new homebuyers are struggling with affordability on both the buying and renting sides.
More than 28 percent of the homebuyers cited affordability as their main concern when looking at a new home, with the main sentiment of “prices are rising or are too high.” The price of homes also was the main concern last year; however, the gap between the concerns has widened.
Competition from other buyers for homes was No. 2 on the list of concerns but dropped from a 17 percent response among homebuyers in 2015 to 13 percent.
Lack of available inventory closely was behind competition from other buyers at 12.4 percent, also down from 2015’s 14.4 percent rate.
“In previous surveys, the second- and third-most cited concerns made up a far higher percentage of total responses,” the study said. “Last year, it was 31.4 percent, while in May, it was 33.5 percent. In other words, affordability is gaining prominence as the number one concern among buyers.”
Ten percent of buyers cited they had no concerns, which was the only other response with a double-digit response rate.
Millennial homebuyers, those under the age of 35, cited affordability as their top concern at 32.5 percent, competition at 16 percent and inventory at 12 percent. Also, the ability to pay for a down payment was 10.3 percent for millennials.
As affordability is a main concern, the study did cite respondents are optimistic about the future prospects. Redfin said 8 percent of homebuyers felt home prices would rise 5 percent or more, whereas 66 percent said they expect prices to increase between 2 percent and 5 percent, and 13 percent said prices would drop.
While affordability is the main concern among homebuyers, many of those are being driven to owning from high rent costs.
More than 45 percent of the first-time homebuyers in the survey said they were looking for a home because rental prices grew to be too much as opposed to 2015, when nearly 25 percent of first-time buyers said they were looking for a house because of the high rent.
Aside from rental prices, life events — such as child birth or marriage — was the reason most first-time homebuyers sought a home, which was the top reason for all respondents.
High rents drove 22 percent of buyers to look at getting into the market, which is nearly 10 percent higher than 2015 but lower than May’s survey at 24.4 percent.
While looking at homes to buy, 44.6 percent of buyers looked first at the quality, design and layout of a home. Millenials, however, looked first at school quality at a 43.4 percent rate. Compared to the total respondents, millenials also cared more for easy commutes, green space and walkability.
Brexit and the stock market have almost no effect on the decision to buy, with 82.2 and 86.6 percent, respectively, saying the issues had no effect.
Housing also is not seen as a major issue in the upcoming presidential election.
The inclination to buy also is rising among prospective homebuyers, with 29.4 percent saying they’re more likely to buy than they were last year. Buyers felt less pressed to buy because of price or mortgage rate increases, however.