June 1, 2017 – One in 3 new homeowners are categorized as “want to buy” customers while more than 1 in 4 are “need to buy” customers, according to a recent Welcome Home quarterly survey released by the Pennsylvania Association of Realtors®.
Thirty-one percent of buyers in the second quarter this year bought their new home unrelated to reasons of financial hardship or an unexpected life change.
“Consumers who ‘want to buy’ said they were either tired of renting, looking for a home in a good school district, buying a second home or who just wanted more living space,” said PAR President Kathy McQuilkin. “Since the beginning of 2016, a total of 34 percent of buyers fall into the category of ‘want to buy’.”
Twenty-six percent of buyers pointed to clear and sudden changes in life circumstance as their most important reasons for buying a home. These “need to buy” individuals include buyers who recently got married or divorced, had a death in the family, needed to downsize or needed a house with one floor. A total of 29 percent of those surveyed are in the “need to buy” category since the first quarter of 2016.
“While the 30-year mortgage and cash are the preferred financing options for both groups, we found that consumers who ‘want to buy’ are almost twice as likely to use a financing product such as an FHA loan than ‘need to buy’ consumers,” added McQuilkin.
Consumers who needed to buy were more likely to purchase with cash than consumers who wanted to buy (35 percent vs. 23 percent), but they were about equally likely to say they used a 30-year mortgage to buy their new home (37 percent vs. 40 percent).
The Welcome Home surveys are conducted for PAR by Keystone Analytics® and provide information on consumer homebuying trends.