Despite more than half of surveyed prospective home buyers believing the market is more competitive this year, 54% plan to buy when they intended or speed up their home purchase. According to Bank of America’s 2023 Home Buyer Insights Report, of those who plan to buy as intended, 62% are Gen Z and 55% are millennials.
Two in five surveyed believe the housing market is in favor of sellers, while 18% say it’s a buyer’s market; 31% agree that it’s neither. Whether scrolling through a real estate app (52%) and/or visiting open house events for fun (31%), 67% of prospective buyers are actively looking at homes for sale. Two-thirds, 65%, of those who scroll through listings are interested in what their current budget would get them today.
While buying challenges include high prices and interest rates (51%), lack of cash for down payments (37%), and low credit scores (37%), 40% still say they are more confident in their ability to buy a home today compared with last year. Of the surveyed buyers, 36% are less confident than last year, and 28% feel nearly the same.
“The market is less frenzied as rates have moderated, and that may be impacting perception,” says Matt Vernon, head of retail lending at Bank of America. “And low inventory is still creating a highly competitive environment. Home buyers are doing the right thing by taking time to understand the market, weigh their priorities, and determine what fits into their budgets.”
Almost half, 47%, of all prospective buyers say they would buy in the current market because they are tired of renting and rent increases, while 28% want to start building equity. For Gen Z, 56% plan to purchase in the next two years. The same percentage of millennials plan to buy in the same time period as well as 58% of Gen X.
Over half, 55%, plan to purchase a home with a spouse or a partner, while 38% say they’re planning to buy alone. Respondents say they are willing to put up to 25% of their monthly income toward mortgage payments for a starter home and 30% for a forever home, compared with the 29% they’re willing to put toward monthly rent.
Most respondents, 82%, say they are comfortable talking with friends about how they came up with their down payment, but only 17% have directly asked a friend how they were able to afford the upfront costs. The report notes that only 39% of prospective buyers know how to find down payment assistance programs.
