The number of homebuyers looking to downsize from their current home is trending downward, while those looking to upsize has increased, according to the recent Welcome Home survey conducted for PAR. Homeowners looking to downsize decreased to 8%, from a high of 18% in 2017, while those who wanted to upsize increased to 15% from a low of 7% in 2016.
I think many Realtors® are seeing this in their own market. As fewer homeowners are downsizing, it’s making it harder for families to purchase larger homes. Many of us have seen this ripple effect. When one area of the market stalls or declines, it affects other buyers and sellers. The lack of larger homes in a market where there is an increased demand for them makes it harder for buyers to purchase the home they need for their family.
It shows that buyers have to identify the house they want more quickly and if they already own a home, they have a shorter time to sell their previous home to avoid paying two mortgage payments.
In addition, those surveyed said that the two greatest stressors when buying a new home were paperwork or selling a prior home. That’s more than doubled in the last two years that PAR has asked this question on the survey. As Realtors®, we need to be reassuring buyers about the homebuying process.
The Welcome Home survey also found that homebuyers who need to buy a home remains steady, while homeowners who want to buy a home is beginning to increase again. The survey shows that buyers’ reasons for wanting to buy include: tired of renting, school quality, second homes and more living space. Wanting to buy a home increased to 30% in the second quarter of 2019 from a low of 19% compared to the second quarter of 2018.
It’s clear from the results of the survey that use of the Federal Housing Administration loans is increasing among first-time homebuyers and has since 2016. The study again confirmed that the most popular financing tool continues to be the 30-year mortgage, with nearly 50% of homebuyers choosing it.
The use of FHA loans has continued to increase for first-time homebuyers. These loans are designed for low-to-moderate income borrowers, require lower minimum down payments and lower credit scores than many conventional loans.
For more information on the Welcome Home survey, visit PARealtor.org.