Low rates, expensive rent costs, a wealth of financing option, all indicators for why it’s a good time to buy a home, and yet they don’t rank too high on a buyer's list of concerns.
First-time homebuyers (who we mean by "no one") are motivated by aspiration and emotion, think ‘a home for my kids to run around in’ or ‘a place to finally call my own.’
Bank of America’s new Homebuyer Insight report found that only 15% of first-time homebuyers surveyed are motivated by the reason that it’s simply a good time to buy a home.
More first-time buyers are motivated by emotional factors (76%) than financial factors (63%) when making the decision to buy a home, the report found.
The survey was conducted online by Braun Research on behalf of Bank of America and surveyed 1,001 respondents throughout the U.S., comprised of adults 18+ who want to buy a home in the future.
This chart breaks down what is motivating first-time homebuyers.
Click the chart to enlarge
(Source: Bank of America)
But as much as homebuyers site emotions as the main motivation to buy a home, they cite finances as one of the top reasons blocking them, especially when it comes to the down payment on a home.
One of the most common misconceptions homebuyers have on down payments is that they must put 20% down. In reality, there are a ton of options out there, including mortgage options that require as little as 3% down.
For borrowers that do choose to buy this spring, here is what the market looks like.
The Bank of America Homebuyer Insight report also found that first-time homebuyers want to skip the ‘starter home.’ Check here for a breakdown of what they prefer.