According to the recently released BMO Harris Bank Home Buying Report, 52% of Americans say they are likely to buy a home in the next five years. Americans surveyed for the report said they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also had other interesting revelations.
Those Looking to Buy
- 74% of those looking to buy a new home will consult a real estate agent
- 59% said they will visit online real estate websites
- 37% will seek recommendations from friends and family
- 78% plan to get pre-approved before seriously searching for a home
Those Who Already Own
- 75% of current home owners set a budget before looking for a home. 16% ended up spending less while 13% went over their budget.
- 63% of American homeowners spent under six months looking for a new home before they made a purchase.
- 8% bought their home without participating in an active real estate search - or even any plan to buy at all - because a specific property caught their attention.
The last point is very interesting: Of those that purchased a home, 8% bought “without any plan to buy at all”. A property caught their attention and they acted on it.
Why are More People not Planning their Next Move?
Why are people that are considering a move not putting their home search to a plan, and instead, buying only when a property catches their attention? A recent article by Fannie Mae may give us that answer, there is evidence that a large numbers of homeowners are dramatically underestimating the equity they have in their current home. The report explains:
“Homeowners may be underestimating their home equity. In particular, if homeowners believe that large down payments are now required to purchase a home, then widespread, large underestimates of their home equity could be deterring them from applying for mortgages, selling their homes, and buying different homes.”