People buy homes for many different reasons, and the mix of reasons has shifted lately. Family-related reasons, such as marriage or divorce, is an increasing percentage, while the desire for homeownership is a decreasing percentage of home buyers. This supports our forecast for 62% homeownership.
Better housing – better quality homes, safer neighborhoods, the desire for homeownership, or some other housing-related factor – is still the number one reason, but the percentage moving for “housing-related” reasons has steadily declined from 59% in 2003 to 43%, according to the Census Bureau.
Look at the dramatic decline in “housing-related” reasons for buying, while “family-related” reasons have increased.
Since the majority of buyers still purchase for “housing-related” reasons, we delved deeper into the data. The importance of homeownership as the primary motivator is declining. Just one-third of “housing-related” buyers said it was because they desired to own as opposed to rent – down from nearly one-half in 2001. Conversely, a growing percentage of buyers cited “wanted cheaper housing,” which is clearly because rents exceed mortgage payments in so many markets around the country. In our view, these buyers are the smart ones who are defying the conventional wisdom of their friends and making great long-term decisions.
Throughout the last decade, the desire for a new or better home has remained strong. Buyers told us the same in our own 2011 Consumer Insights survey, stating that design, style and the ability to personalize their home are significant reasons in their decision to buy. With the general view that prices and mortgage rates are more likely to get better than worse, many buyers are staying on the sidelines. When they can say, “We should have bought 6 months ago,” we expect the pent-up demand to begin to unleash.
We just closed our 2012 Consumer Insights survey, with more than 14,000 participants answering more than 80 questions! Once we get the data analyzed, we will have tremendous insight into buyer preferences and motivations.
