Survey: Younger Buyers More Likely to Consider Foreclosed Homes

Posted: July 12, 2013 in California Real Estate News, National Real Estate News

Younger homebuyers are far more open to the idea of buying a foreclosure compared to older buyers, a National Association of Realtors’ (NAR) survey on buyer and seller trends revealed.

Overall, 44 percent of surveyed buyers said they did not consider a home in foreclosure. When broken down by age group, however, only 31 percent of Millennials (32 and younger) said they did not consider purchasing a home in foreclosure compared to 65 percent for buyers aged 67 to 87.

The share of buyers who did not consider a foreclosure increased with age, the NAR found. For example, among Generation X buyers (aged 33 to 47), 43 percent did not consider a foreclosure, while 53 percent of those aged 58 to 66 were in the same category.

For buyers who considered foreclosed homes, 29 percent said they decided not to buy one because they could not find the right home.

Another 16 percent didn’t buy a foreclosure because the home was in poor condition, while 15 percent said the process was too difficult or complex.

The survey also found younger buyers were more optimistic about their purchase compared to older age groups.

Eight-five percent of Millennials considered their home purchase to be a good financial investment compared to 64 percent for buyers aged 67 to 87.

“The sheer size of the Millennial generation, the largest in history after baby boomers, is expected to give a powerful boost to long-run housing demand, though in the short-term mortgage accessibility and student debt repayment remain challenges,” noted Paul Bishop, NAR VP of research.

According to the survey, Gen X buyers accounted for 31 percent of recent home purchases, making them the largest groups of buyers. Millenials were the second largest, accounting for 28 percent of buyers.

Gen X buyers tended to have a higher income and spend more on a home. NAR reported the median income for Gen X buyers was $93,100, and they paid a median of $235,000 for a home. For Millennial buyers, median income was $66,200, while their median home purchase price was $165,000.

The survey also found reasons varied for buying a home, with 50 percent of Millenials stating the desire to own as the main reason compared to only 7 percent for buyers aged 67 to 87 and 32 percent for Gen X buyers.

Finding the right property was named as the most difficult step in the home buying process for at least 46 percent of buyers across all age groups. Meanwhile, getting a mortgage was cited as the most difficult step by just 16 percent of Millennials and 9 percent of buyers aged 58 to 66.

By: Esther Cho

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