This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Home Buyers Get 'Aggressive,' and Sellers Get Their Costs Paid

Stocks in this article: TRLA

NEW YORK ( TheStreet) -- U.S. homebuyers are getting creative and aggressive in the search for the perfect house.

In fact, the real estate market has become so competitive that about two-thirds of all U.S. homebuyers say they would use "aggressive" tactics to buy a home, including paying all the seller's closing costs and placing a bid well above the asking price for a home, according to Trulia.com's (TRLA - Get Report) latest homebuyer survey.

Homebuyers are responding to an increasingly competitive real estate market, as U.S. home sales were up 8.3% in June -- a five-year high -- even as mortgage rates have risen in the past 30 days.

"The recent increase in mortgage rates hasn't slowed demand as long as home affordability remains high," said Bob Walters, chief economist at Quicken Loans . "We are, however, seeing an increased urgency from potential new homebuyers as they move to secure today's historically low rates."

The Trulia data show Americans are becoming uneasy about the housing market, primarily over the possibility of missing out on a good deal as home prices and mortgage rates trend upward.

Trulia says the No. 1 worry among homebuyers is that mortgage rates will keep rising before they can lock in a deal on a new home (41% of Americans surveyed.)

Another 37% are anxious over higher home prices, as U.S. residential real estate prices have risen 5.27% from June 2012 to last month, according to Realtor.com. Trulia adds that home prices in so-called "hot markets" such as Oakland, Calif., and Las Vegas have risen by over 15%.

Some additional numbers from Trulia:

  • 38% of buyers in the nation's "hottest" markets worry they won't find a home for sale they like.
  • 33% of buyers in those "hot" markets worry they will have to compete with other buyers over their dream home.
  • 30% of homebuyers worry they won't qualify for a mortgage.
  • U.S. households with annual incomes of more than $100,000 annually are more likely to bid higher than a home seller's asking price and more likely to offer to pay the seller's closing costs to clinch a deal.
  • U.S. households with less than $50,000 in annual income are more likely to borrow from family or friends to make a 20% deposit on a new home.
  • Younger homebuyers are especially aggressive about locking down a home deal.

"Although buying a home is still much cheaper than renting, it's a stressful time to be a homebuyer," says Jed Kolko, Trulia's chief economist. "Consumers are worried that mortgage rates and prices will keep rising before they buy, and many are willing to fight over the limited number of homes for sale. Watch out if a millennial wants the home you're bidding on: they're more willing than their parents' generation to outbid, borrow or make a personal plea to get the house they want."

This is all nice for homeowners, who have suffered declining home values and a soft real estate market since 2008. They are most assuredly in the driver's seat now.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs