Many Phoenicians Planning First Home Purchase, but Persistent Homebuying Myths Hold Back Others
Phoenix’s millennials are straying from the norm as they redefine life’s priorities, according to the latest Bank of America Homebuyer Insights Report. Seventy-four percent of local millennials say owning a home is a top priority, tied with being able to retire (74 percent) and far outranking getting married (48 percent) and having children (51 percent).
The report, which explores the attitudes, preferences, and behaviors of the modern homebuyer, also finds that many local millennials equate homeownership with personal (67 percent) and financial (54 percent) success. Prospective millennial buyers in Phoenix also associate purchasing a home with maturity (53 percent), adulthood (58 percent) and independence (43 percent).
Additional Phoenix-specific highlights from the report include:
Local renters in Phoenix are torn on the “own vs. rent” debate, with 58 percent believing that renting long-term will be more expensive than buying a home. The other 42 percent say it will be just as or less expensive than owning.
Yet, 77 percent believe their rent will continue to rise every year or every other year. And 59 percent pay more than 30 percent of their income in rent each month.
When asked what they dislike about renting, Phoenicians (49 percent) are more likely than their national counterparts (43 percent) to say “not feeling like it’s truly home.” They’re also more likely to dislike rising rental costs (58 percent vs. 52 percent) and to feel like they’re throwing money away (59 percent vs. 49 percent).
Top renter misconceptions in Phoenix include:
- Thirty-nine percent believe that 20 percent down is required to buy a home
- Forty-five percent believe they must pay private mortgage insurance if they don’t put 20 percent down
- More than one-quarter believe they need to have a “perfect” credit score to be considered for a mortgage
The five Ws of homebuying: Prospective buyers in Phoenix are being purposeful in their homebuying planning
Who: While 62 percent of first-time local buyers plan to buy with a spouse or partner, others are venturing out on their own, as 34 percent say they plan to purchase their first home solo.
What: When thinking about their first home, buyers in Phoenix prefer:
- A starter home (50 percent) vs. a forever home (50 percent)
- A large backyard (54 percent) vs. more square footage (46 percent)
- A modern layout (64 percent) vs. a home with “good bones” (36 percent)
- Updated appliances (85 percent) vs. an updated exterior (15 percent)
Where: 53 percent are looking to stay in the Phoenix area, while 32 percent plan to buy elsewhere.
When: 48 percent of local residents plan to buy in the next two years, and 76 percent say saving for a down payment is a financial priority.
Why: Phoenicians say having enough money saved (62 percent) and a higher salary (44 percent) are their top motivations to buy for the first time.
Learn more about the Bank of America Homebuyer Insights Report.
Bank of America’s Consumer Lending unit includes First Mortgage, Home Equity, Consumer Vehicle Lending and residential real estate lending for our Global Wealth and Investment Management business units. Each business is focused on delivering a distinctive and consistent client experience through competitive product offerings, quality loan production, choice of multiple connection and delivery methods, and operational excellence based on a client’s unique attributes and relationship with us.
Convergys Analytics conducted an online survey on behalf of Bank of America between January 16 and February 2, 2018. Convergys surveyed a national sample of 2,000 adults age 18+ who currently own a home or plan to in the future. In addition, an augment was conducted to reach 300 adults in seven local markets: Austin, Boston, Charlotte, Dallas, Nashville, Phoenix, and San Francisco. The margin of error for the national quota is +/- 2.6 percent, and the margin of error for the oversampled markets is approximately +/- 5.8 percent, with each reported at a 95 percent confidence level.
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,400 retail financial centers, including more than 1,700 lending centers, more than 1,900 Merrill Edge investment centers and more than 1,300 business centers; approximately 16,100 ATMs; and award-winning digital banking with approximately 36 million active users, including 25 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
# # #
Reporters may contact:
Kris Yamamoto, Bank of America