Many San Franciscans Planning First Home Purchase, but Persistent Homebuying Myths Hold Back Others
San Francisco’s millennials are straying from the norm as they redefine life’s priorities, according to the latest Bank of America Homebuyer Insights Report. Eighty-three percent of local millennials say owning a home is a top priority, more than being able to retire (73 percent) and far outranking getting married (47 percent) and having children (42 percent).
The report, which explores the attitudes, preferences, and behaviors of the modern homebuyer, also finds that many local millennials equate homeownership with personal (57 percent) and financial (49 percent) success. Prospective millennial buyers in San Francisco also associate purchasing a home with maturity (47 percent), adulthood (42 percent) and independence (30 percent).
Additional San Francisco-specific highlights from the report include:
Local renters in San Francisco are torn on the “own vs. rent” debate, with 45 percent believing that renting long-term will be more expensive than buying a home. The other 55 percent say it will be just as or less expensive than owning.
Yet, 73 percent believe their rent will continue to rise every year or every other year. And 47 percent pay more than 30 percent of their income in rent each month.
When asked what they dislike about renting, San Franciscans (54 percent) are more likely than their national counterparts (52 percent) to dislike rising rental costs. They’re also more likely to feel like they’re throwing money away (51 percent vs. 49 percent).
Forty-three percent believe that 20 percent down is required to buy a home.
Nearly the same number (44 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.
Who: While 63 percent of first-time local buyers plan to buy with a spouse or partner, others are venturing out on their own, as 33 percent say they plan to purchase their first home solo
What: When thinking about their first home, buyers in San Francisco prefer:
A forever home (51 percent) vs. a starter home (49 percent).
More square footage (52 percent) vs. a large backyard (48 percent).
A modern layout (62 percent) vs. a home with “good bones” (38 percent).
Updated appliances (71 percent) vs. an updated exterior (29 percent).
Where: 40 percent are looking to stay in the San Francisco area, but 47 percent plan to buy elsewhere.
When: 31 percent of local residents plan to buy in the next two years, and 63 percent say saving for a down payment is a financial priority.
Why: San Franciscans say having enough money saved (55 percent) and a higher salary (42 percent) are their top motivations to buy for the first time.
Learn more about the Bank of America Homebuyer Insights Report.
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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.
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