Potential Homebuyers to get off Sidelines, Chase Research Shows
April 28 2015 - 9:00AM
Business Wire
Optimistic potential buyers cite rising rental
prices, low interest rates as top reasons to buy now
As the busiest homebuying season of the year gets under way,
potential homebuyers are poised to get off the sidelines and enter
the market, according to Chase’s national survey “Insights: From
the Mind of the Homebuyer” released today. Three in ten potential
homebuyers say they plan to purchase a home in the next 18
months.
What’s getting interested buyers off the sidelines? Rising
rental costs, low interest rates
The majority of interested buyers (62 percent) think that now is
a better time to purchase a home compared to last year. Top reasons
Americans want to buy now include rising rental costs and
historically low interest rates. Whether shifting from renting to
buying, or upgrading from their current home, potential homebuyers
want to make a move before interest rates begin to rise, as experts
predict.
- 32 percent want to buy soon in order to
take advantage of low rates; 35 percent say that 30-year fixed
mortgage interest rates rising above 4 percent would delay their
decision to buy
- 20 percent say the rising cost of
rent—making buying a better value—is their number-one reason to
buy
- Equally important, 20 percent say the
desire to make an upgrade from their current home was their top
reason to buy
Biggest concerns about today’s housing market:
Affordability and competition
Potential homebuyers are optimistic that it’s a good time to buy
but they anticipate challenges. Besides interest rates, Chase’s
survey found that interested buyers are concerned about finding the
home they want within their budget…and beating out the competition
to get it.
- Nearly 70 percent of prospective
homebuyers worry that they may have already missed the chance to
buy at the best time because of rising home prices
- The majority of potential homebuyers
are concerned about finding a home that fits within their budget
(56 percent) and that’s located in a quality neighborhood (56
percent)
- 3 out of 4 homebuyers are concerned
their offer will be outbid by others
- 3 in 5 homebuyers anticipate that they
may need to compromise and buy a smaller home, or consider other
neighborhoods outside their top choices, due to rising prices
“Buyers are clearly concerned about housing inventory and rising
prices, especially during the competitive spring buying season,”
said Cecelia Barbieri, SVP of marketing for Chase Mortgage Banking.
“But the research shows that interested buyers are optimistic and
ready to act on their goals. In fact, 73 percent said they’d give
up things like eating out and taking vacations in order to buy
their dream home.”
Homebuying misperceptions: Confidence and knowledge
don’t match
While homebuyers are concerned about affordability and
competition in the current market, they are less concerned about
navigating the homebuying process. However, their perceptions and
actual knowledge about the homebuying process don’t match.
- 43 percent of potential homebuyers feel
that getting a mortgage will be easier this year
- 42 percent say they aren’t at all
concerned about lacking understanding of the mortgage process
- However, just 1 in 4 interested buyers
correctly answered a series of questions about homebuying—
including how annual percentage rates work, down payments and
lenders
Relationships, gender and buyer’s anxiety
Potential homebuyers may say they aren’t concerned, but their
anxiety about the homebuying process is high, according to Chase’s
research. In fact, interested buyers are considerably more anxious
about the buying process (70 percent) than they are about getting a
root canal (64 percent) or public speaking (62 percent). In
addition, the survey revealed tensions among homebuying
couples:
- Men and women differed in their
feelings on how important it is to stick to the budget; about half
of women (49 percent) say they are more conservative than their
partner and don’t want to go beyond their agreed-upon budget, while
39 percent of men say they are less conservative than their partner
and are willing to push their budget limit to get the home they
want
- One-third of homebuying couples have
been bickering with their partner during the process
“It’s understandable why first-time homebuyers are anxious about
the process, but preparation is the best defense,” Barbieri said.
“We want to make the homebuying process as easy and stress-free as
possible—that’s why we offer informative resources, including
YouTube videos, a mortgage calculator, a step-by-step buying guide
and a webinar on our website.”
Additional resources for homebuyers are available at
www.chase.com/mortgage.
About the Survey
A telephone survey was conducted by Braun Research, an
independent research company. The report presents the findings
among a nationally representative sample of 1,098 Americans with a
qualifying age of 25 – 65, with a 500-respondent oversample among
those who intend to buy a home within the next 18 months. The
survey was conducted from March 5th through March 22nd, 2015, and
the margin of error is +/- 2.9 percent for the national sample;
about +/- 6.1 percent for the oversample quota; with each reported
at a 95 percent confidence level.
About Chase
Chase is the U.S. consumer and commercial banking business of
JPMorgan Chase & Co. (NYSE:JPM), a leading global financial
services firm with assets of $2.5 trillion and operations
worldwide. Chase serves nearly half of America’s households with a
broad range of financial services, including personal banking,
small business lending, mortgages, credit cards, auto financing and
investment advice. Customers can choose how and where they want to
bank: 5,600 branches, 20,000 ATMs, online, mobile and by phone. For
more information, go to www.chase.com.
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ChaseAshlei Bobo, 212-270-6488Jason Lobo, 212-270-1599
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