Gen Z and Millennials Remain Unfazed by Supposed Seller’s Market
Bank of America’s 2023 Homebuyer Insights Report reveals that many prospective homebuyers remain committed to purchasing homes despite perceiving a seller’s market. While 55% believe the housing market has become more competitive, 54% still plan to proceed with their purchases as initially intended. Only 18% view it as a buyer’s market, whereas 39% consider it a seller’s market. Barriers to buying include high prices and interest rates for 51% of respondents and a lack of cash reserves or low credit scores for 37%. Nearly half (47%) express a desire to buy for financial security, driven by dissatisfaction with renting and increasing rent costs.
The report also highlights active engagement in the homebuying process, with 67% of prospective buyers actively searching for homes, 52% utilizing real estate apps, and 31% visiting open houses for enjoyment. Browsing homes is considered enjoyable by 41% of respondents, who use it to envision their future homes (37%) or appreciate others’ home decorations (32%). Additionally, 65% of browsers are keen to understand what their budget can afford. The survey emphasizes the significance of word-of-mouth recommendations, as 82% of respondents feel comfortable discussing down payment strategies with friends, although only 17% ask about upfront costs. The survey involved 1,000 respondents, including homeowners, renters, and future homebuyers.
Redfin: Home Listing Decline and Accelerated Home Sales Amid Inventory Shortage
Redfin has reported a decrease in home listings and an increase in the speed of home sales. During the four weeks ending on May 7, new listings dropped by 19% compared to the previous year, leading to a decline in total inventory. Pending home sales were also down by 16% year-over-year, indicating a lack of available listings and potential buyers being deterred by high mortgage rates and monthly payments.
Despite the shortage of inventory, pending sales have increased recently, following seasonal patterns.
The housing market’s current challenge is the need for more inventory, as many potential sales are awaiting lower mortgage rates that would incentivize current homeowners to sell. However, it is unlikely that mortgage rates will decrease significantly soon. Redfin’s Deputy Chief Economist, Taylor Marr, noted that although the pool of buyers is relatively small, they are determined, with nearly half of the homes selling within two weeks. Marr highlighted the unusual combination of a less active market due to limited listings while remaining fast-paced and competitive.
The report indicated a slight increase in the Redfin Homebuyer Demand Index compared to the previous month and only a 2% decline from the prior year, suggesting a smaller annual drop in demand than the last year. The report from Redfin also revealed regional variations, with Austin experiencing increased demand but fewer listings, resulting in minimal competition. On the other hand, Jacksonville saw subdued activity from sellers and buyers, with homeowners willing to sell only if necessary.
Special Advisory for Mortgage Professionals, Real Estate Professionals, and Homeowners
According to the Better Business Bureau, scammers posing as mortgage lenders are preying on homeowners. The scam involves sending letters to homeowners claiming to be from their mortgage provider and informing them that their home warranty needs to be renewed. The letters frequently have fine print disclaimers stating they are not being sent on behalf of the homeowner’s current mortgage. Homeowners are encouraged to contact their lender immediately using the details on their mortgage statement or through an online search to avoid falling for this scam. Before agreeing to any contracts for house warranties, they should also be wary of any threats or high-pressure promises.
Vaimberg, Ron. “Weekly Newsletter – January 6, 2023.” Ron Vaimberg International, Ron Vaimberg, 6 Jan. 2023, https://rvionline.thinkific.com/courses/take/rvi-weekly-newsletter/texts/41523497-weekly-newsletter-january-6-2023.