Photo: Matthew Rutledge/Flickr
Nearly half of US first-time homebuyers are turning to the housing market to escape high rental costs, according to a new survey conducted by online brokerage Redfin. Affordability is chief among buyer concerns, especially with Millennial and first-time buyers.
In the Redfin survey, 45.5 percent of first-time homebuyer respondents claimed high rent was their primary motivator for becoming homeowners. This number was up substantially from the 24.7 percent seen last year.
Similarly, 22 percent of all buyers surveyed said the high cost of rent was their chief motivator — a marked increase from last year’s nearly 13 percent, but down slightly from 24.4 percent in May 2016.
When asked what concerns you most about buying, over 28 percent of homebuyers cited high home prices as their biggest concern, up nearly 2 percent from last year
Competition from other buyers was the second highest ranked concern at 13 percent, a decrease of 4 percent year-over-year. Lack of inventory rounded out the top three Redfin buyer concerns at just over 12 percent, down from the 14 percent seen last year.
Affordability outpaced both competition and inventory in the survey by a wider margin than in previous years. The widening gap shows how quickly affordability is gaining prominence among buyer concerns, according to Redfin.
Only 10 percent of respondents cited “no major concerns” and no other response registered double digits.
Millennial homebuyers — buyers who are 35-years-old and younger — reported even larger affordability concerns with nearly 33 percent making affordability their top concern.
Competition and inventory ranked as the second and third concerns among Millennial buyers — at 16 percent and 12 percent respectively — but worrying about a downpayment was also reported by 10 percent of Millennial buyers.
This Redfin survey was conducted between August 7th and 15th and included responses from 1,887 homebuyers in 41 states and DC.
You can read the entire Redfin report here.