Trulia, Inc. (NYSE: TRLA), a leading online marketplace for home buyers, sellers, renters, and real estate professionals, today released the results of its Summer 2013 American Dream Survey. The latest findings reveal how today’s competitive real estate market has impacted consumer sentiment toward homeownership and the desperate measures people are willing to use to buy a home. Harris Interactive conducted the online survey on behalf of Trulia among 2,029 U.S. adults, age 18 and over, between June 24 and 26, 2013.
Top House Hunting Worries: Rising Mortgage Rates and Home Prices
Prospective home buyers are feeling the pain of a booming real estate market. The top worry among Americans who plan to buy a home someday, if they were to buy a home in 2013, is that mortgage rates would rise further before they buy (41 percent), followed by rising home prices (37 percent). For consumers in the hottest markets – where asking home prices rose more than 15 percent year-over-year, such as Las Vegas and Oakland – buyers’ worries are even more intense for most of the concerns listed below.
|Top House Hunting Worries||Overall||In hottest markets|
|Mortgage interest rates would rise before I buy||41%||45%|
|Home prices would rise before I buy||37%||42%|
|I would not find a home for sale that I like||36%||38%|
|I would not qualify for a mortgage||30%||25%|
|I would have to compete with many other buyers for the home I wanted||27%||33%|
Note: only among respondents who plan to buy a home someday. Hottest markets are U.S. metros where prices increased more than 15% year-over-year in June 2013, according to the Trulia Price Monitor.
Worried Buyers Taking Desperate Measures to Buy a HomeAmong Americans who would buy a home someday, 2 in 3 (66 percent) would use aggressive 1 tactics to buy a home, including bidding above asking, paying the seller’s closing costs, writing personal letters, or removing contingencies, to name a few. Households earning more than $100,000 a year are more likely to offer to pay the seller’s closing costs or bid above asking, whereas lower-income households making less than $50,000 a year are more likely to borrow money from family or friends to put down 20 percent or make an all-cash offer. Young adults – many of whom are likely to be first-time homebuyers – are especially aggressive in their house hunt, with 78 percent likely to do at least one of these tactics.
|What Buyers Would Do To Get Their Dream Home||Overall||18-34 Year Olds|
|Offer to pay the seller's closing costs||25%||30%|
|Bid 1-5% over the home's asking price||25%||31%|
|Write a personal letter to the home's seller||17%||23%|
|Borrow enough money from family or friends to be able to make a 20% down payment||12%||19%|
|Bid 6-10% over the home's asking price||9%||12%|
|Remove all contingencies||8%||9%|
|Borrow enough money from family or friends to be able to make an all-cash offer||5%||8%|
|Bid more than 10% over the home's asking price||4%||7%|
- “The rising cost of homeownership cuts both ways for consumer confidence,” said Jed Kolko, Trulia’s Chief Economist. “The combination of rising rates and rising prices has made owning 20 percent more expensive, leading people to downsize their housing dreams. But rising prices make housing look like a better financial bet, so a majority of Americans now think homeownership is one of the best investments they can make.”
- “Although buying a home is still much cheaper than renting, it’s a stressful time to be a homebuyer,” said 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.”