According to the 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 that they would be willing to pay an average of $296,000 for a home and would average a 21% down payment. The report also included other interesting revelations.
Those Looking to Buy
- 74% of those looking to buy a new home will consult with 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 homeowners set a budget before looking for a home, and 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 who 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? An article by Fannie Maereveals evidence that a large number of homeowners are dramatically underestimating the equity they have in their current home. The report explains that:
“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.”
Perhaps it is time to sit with a real estate professional to determine the actual equity you have in your house and to take a look at the opportunities that currently exist in the real estate market. This may be the perfect time to move-up, move-down or buy that vacation home your family has always wanted.