What’s driving home sales, higher home prices and bidding wars in many areas of the country? Low housing inventory and low interest rates are often factors, but Bank of America’s 2021 Homebuyer Insights Report found that a sense of community and good neighbors are also key priorities for today’s homebuyer.
According to the survey of 2,000 adults who currently own a home or plan to in the future, half (51%) of younger buyers – those ages 18 to 43 – and nearly one third (32%) of older generations – ages 57 to 75 – say community has become more important over the past year. Specifically, people want neighbors who share similar interests (73%) and are active in the community (70%). Along with a desire for more space and smart home technology, individuals are looking for a sense of connectedness and belonging when it comes to where they live.
“Over the last year, people have had plenty of time at home to reassess their priorities and goals, including how their living space and surroundings fit into their lives,” said AJ Barkley, SVP, Neighborhood Lending and Retail Sales East Executive, Consumer Lending at Bank of America. “We know homeownership remains as important as ever, especially for younger generations looking for that sense of community. We’re helping them take the next steps no matter where they are on their homebuying journey.”
Across all generations, homeowners were more likely than non-homeowners to say they like their neighbors (42% vs. 29%) and neighborhood (44% vs. 32%) more now than they did a year ago. The feeling of safety is also important when it comes to home surroundings and community. Over two-thirds (68%) of younger prospective homebuyers and three quarters (75%) of younger homeowners say safety and security have become greater priorities when choosing where they will live.
Beyond a sense of community, as prospective homebuyers have spent more time at home, they have re-evaluated and placed greater importance on the amount of space they need, both inside and outside. Nearly half (48%) of prospective homebuyers between 18 and 43 say the importance of square footage has increased, and 60% say outdoor space is more important to them now.
The need for space has traditionally meant a move to the suburbs. While 42% of younger prospective buyers currently live in cities, only 24% want to own a home there. Half (48%) want to buy in the suburbs and 29% want to buy in rural areas. This is an increase from last summer, when 18% indicated a desire to purchase a home in a rural area.
The past year has also given people a peek into the homes of their coworkers, family and friends amidst the virtual environment. Three quarters (75%) have participated in video calls, and of this group, 37% have gotten ideas for something to do in their own home. A quarter (25%) have even asked others for information on where something was purchased or how a certain renovation was done based on what they saw.
The home has become more than a place people leave in the morning and come back to at the end of the day. Two-thirds (66%) of all respondents agree that activities done in the home have changed, and this is especially true for younger generations (77%).
Additionally, younger prospective buyers are expressing a desire for new technologies in their homes, including smart/Wi-Fi enabled security system (51%), solar energy products (42%), and smart/Wi-Fi enabled appliances (44%).
Despite this uncertain time, 65% of younger homeowners say their financial security has remained stable compared to 51% of non-homeowners in the same age group. It’s no surprise that 18- to 43-year-old prospective buyers are eager to swap unpredictable monthly rents with steady monthly mortgage payments, with nearly half (46%) saying that building equity is now more important than ever. They recognize that homeownership is a way to build long-term stability.
“Homeownership is one of the most positive drivers of wealth creation,” shares Barkley. “That’s why we recently tripled our financial commitment to affordable homeownership solutions, which include grants to help home buyers with their down payments and closing costs, with no repayment required.”
Those ready to leave renting behind aren’t going into homebuying blindly; they’re taking action. Most (87%) prospective buyers ages 18 to 43 say saving to purchase a home is a priority. Others are even accelerating their homebuying timelines (19%) compared to last summer (14%). In today’s competitive market, it is important to get a mortgage preapproval and plan ahead to compete with other buyers. For those ready to start their home search now, the Bank of America Real Estate Center® provides a simple way to research neighborhoods, shop for homes and identify properties that may be eligible for the bank’s homebuyer grants.
The desire to own a home remains strong as many take steps on the path to homeownership. Learn more about Bank of America’s commitment to supporting clients on the journey to homeownership, including the Homebuyer Insights and affordable homeownership resources.
Sparks Research conducted a national online survey on behalf of Bank of America between February 18 and March 1, 2021. Sparks surveyed a national sample of 2,000 adults ages 18+ who currently own a home or plan to in the future. In addition, an augment of 185 surveys was conducted to oversample First Generation homeowner populations (363 surveys in total). The margin of error for the national quota is +/- 2.2 percent at the 95 percent confidence level. Select questions allowed respondents to choose more than one answer, resulting in responses that may equate to more than 100 percent.
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Susan Atran, Bank of America