Pennsylvania markets saw an increase in younger buyers this year, according to the Welcome Home survey conducted for the Pennsylvania Association of Realtors®. This trend has provided PAR with some insight into how younger buyers may change market demands and how we may want to adjust our presentations to provide better service to these new clients.
More than half of new homebuyers were under the age of 50, which is a substantial increase from previous surveys. And those younger buyers have different reasons for buying a home than more mature buyers.
For example, 19 percent of homebuyers said being tired of renting was their primary reason for buying, compared to the past year, when an average of only 9 percent said this was their top reason for buying. It’s more likely for younger buyers to cite being tired of renting, compared to seasoned buyers.
These younger buyers also noted expanding families, needing more space and relocation as their primary reasons for buying a home. Buyers over the age of 50 were more likely to say relocation was their main reason for a home purchase.
A 30-year mortgage is the most popular financing option for younger buyers. The Welcome Home survey shows 60 percent of the youngest buyers took out a 30-year mortgage and 47 percent of all buyers reported using a 30-year mortgage to finance their home, which is the highest reported share of homebuyers using that financing in the life of our Welcome Home surveys. A little more than 10 percent of buyers also took advantage of Federal Housing Administration loans.
Speaking of financing – money questions continue to be cited as the biggest stress in buying a home. As Realtors®, we may want to consider how to help ease this part of the purchase by reviewing loans and giving more detailed explanations. In addition, more than 10 percent of new homebuyers said that paperwork and selling their previous home were their biggest stress sources during the home buying process.
In the last year, the Welcome Home study has shown more and more buyers lament the volume and speed with which paperwork needed to be completed. They’re also worrying about the timing of the sale of their previous home. I’ve noticed, as I’m sure you have, that these new stresses appear to be a symptom of a more challenging market for buyers, where lower inventory and rising demand increase the pace of the buying process.
The Welcome Home surveys are conducted for PAR by Keystone Analytics® and provide information on consumer homebuying trends. More survey results are available online at WelcomeHomePA.org.