Nearly 80% Of Prospective Homebuyers Willing to Adjust Their Homebuying Plans, Getting Creative to Achieve Homeownership in 2024

Rhea-AI Summary

RE/MAX, the #1 name in real estate, released a consumer survey revealing that prospective homebuyers are willing to consider creative property and financing options due to fluctuating market conditions and affordability concerns. The survey found that nearly 80% of buyers are considering adjusting their homebuying plans, with 43% considering other property types and financing options. Affordability remains a top priority, with 73% of respondents interested in purchasing a fixer-upper for a lower listing price, and 27.7% considering purchasing a home with a friend or family member. The survey reflects buyers' willingness to go outside their comfort zone to achieve homeownership in 2024.

Insights

Market Research Analyst

The recent survey by RE/MAX highlights a significant shift in consumer behavior within the housing market, reflecting the adaptability of prospective homebuyers to the current economic environment. As interest rates and home prices continue to fluctuate, the willingness of nearly 80% of buyers to adjust their homebuying strategies is indicative of the market's demand elasticity. This adaptability can have a stabilizing effect on the market, as it suggests that demand may remain robust despite changing conditions. However, the trend towards alternative financing methods and property types could lead to a diversification of risk, as less conventional purchases may not follow traditional market patterns.

Financial Analyst

The inclination of buyers to consider properties such as fixer-uppers or multi-family homes and to use non-traditional financing options may influence the real estate sector's financial dynamics. For instance, the fact that more than a quarter of consumers are considering multi-family properties could signal a shift in investment strategies, potentially increasing demand for these types of properties. Moreover, the willingness of buyers to engage in 'super commutes' or to purchase with lower down payments could affect mortgage default risks and the insurance industry. Financial institutions may need to reassess their risk models to account for these emerging trends, as they could impact loan performance and default rates in the long term.

Economist

From an economic standpoint, the survey's findings on homebuyer behavior have implications for broader economic indicators such as consumer spending and savings rates. If a significant portion of the population opts for homes requiring substantial renovations, there could be a boost to the home improvement sector, potentially leading to job creation and increased retail sales. Conversely, the trend of borrowing from friends and family or purchasing with minimal down payments could signal a shift in personal financial management, possibly reflecting a lack of savings or a strategic choice to allocate resources elsewhere. These behaviors may also indicate consumer confidence in future income stability, despite the current economic uncertainties.

New data reveals property and financing options prospective homebuyers are willing to consider.

DENVER, Jan. 23, 2024 /PRNewswire/ -- From purchasing multi-family properties to co-owning with friends and family, prospective buyers are willing to get creative to become homeowners in the next 12 months, new data reveals. In a consumer survey, released today, RE/MAX, the #1 name in real estate¹, showcases Americans' plans for achieving homeownership in 2024.

The housing market has experienced a few years of record-high demand and historically low interest rates. As market conditions continue to evolve, many buyers have been forced to consider other options. The survey found that nearly 80% of prospective homebuyers are considering adjusting their homebuying plans.

"Affordability remains a key concern for homebuyers as home prices, interest rates, and inventory continue to fluctuate," shared Nick Bailey, President and CEO of RE/MAX, LLC. "Despite today's economic environment, it's clear that homeownership is still a priority for many, and the results of our survey prove that buyers are willing to go outside their comfort zone to reach their goal."

Key survey findings include:

Current Market Conditions Continue to Impact Buyers

Fluctuating market conditions and the uncertain rate environment continue to impact homebuyers' plans. Many are considering creative ways to break into the housing market.

• Forty-three percent of respondents have considered both other property types (fixer-upper, foreclosure, or tiny home) and financing options (borrowing from friends and family, purchasing with a down payment of less than 20%, or paying with all cash).
• Fifty-six percent of respondents said they would consider purchasing a fixer-upper in need of remodeling, either for cosmetic or structural reasons.
• Thirty-four percent of respondents would consider purchasing with a down payment of less than 20%.
• Of note, more than nine in 10 respondents were somewhat or very likely to discuss their alternative options with a real estate agent.

Affordability Is the Main Priority

Affordability remains top-of-mind, and homebuyers are willing to explore other property types and financing options to achieve it.

• Seventy-three percent of those who indicated they would consider purchasing a fixer-upper wanted the chance to purchase a home at a lower listing price.
• More than a quarter of consumers indicated they would consider purchasing a multi-family home, defined as a property occupied by the owner and additional non-owner tenants. Half of them would do so to split the cost of monthly mortgage payments.
• Thirteen percent of prospective homebuyers reported they'd be willing to consider a super commute, buying a home 2+ hours from where they work, for more affordability.
• Of the 34% of prospective homebuyers considering borrowing with a down payment of less than 20%:
  • More than 75% would do so because it's what they can comfortably afford.
  • Half would expect to make a down payment of 10% or less.
• Fifty-seven percent of respondents who indicated they would purchase a condo, attached home, or townhouse would do so to achieve lower maintenance costs.
• Respondents also want to make a home uniquely theirs. Of those who reported they would consider purchasing a fixer-upper, nearly 70% would do so to allow them to start with a clean slate.
  • Twenty-eight percent of these respondents are willing to pay $30,000-$50,000 for repairs and renovations, with only 10% saying they'd spend upwards of $90,000.
  • A majority said they're willing to spend less than $70,000, with 23% saying $50,000-$70,000 is their limit, and 25% indicating their sweet spot is $10,000-$30,000.

Buyers Are Turning to Friends & Family for Help

Buyers aren't shying away from asking for help on the path to homeownership.

• 27.7% of respondents would consider purchasing a home with a friend or family member.
• Seventeen percent of prospective homebuyers are willing to ask for help from friends and family when purchasing a home (funds for down payments, co-signing loans, etc.).

To review additional results from the survey, please visit remax.news.com.

Methodology: Data is based on a survey conducted in partnership with Pollfish and fielded October 16, 2023 among 1,000 men and women in the U.S. between the ages 18-54+, who plan to purchase a home in the next 12 months. 

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices and a presence in more than 110 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children's Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.com. For the latest news about RE/MAX, please visit news.remax.com.

¹Source: MMR Strategy Group study of unaided awareness.

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SOURCE RE/MAX, LLC

FAQ

What are the key survey findings from the RE/MAX consumer survey?

The survey found that nearly 80% of prospective homebuyers are considering adjusting their homebuying plans, with 43% considering other property types and financing options.

What are the main priorities for homebuyers according to the survey?

Affordability remains top-of-mind, with 73% of respondents interested in purchasing a fixer-upper for a lower listing price, and 27.7% considering purchasing a home with a friend or family member.

How many respondents would consider purchasing a fixer-upper in need of remodeling?

Fifty-six percent of respondents said they would consider purchasing a fixer-upper in need of remodeling, either for cosmetic or structural reasons.

What percentage of prospective homebuyers are considering borrowing with a down payment of less than 20%?

34% of prospective homebuyers are considering borrowing with a down payment of less than 20%.

How many respondents would consider purchasing a multi-family home?

More than a quarter of consumers indicated they would consider purchasing a multi-family home.

What is the main reason for buyers considering purchasing a condo, attached home, or townhouse?

Fifty-seven percent of respondents who indicated they would purchase a condo, attached home, or townhouse would do so to achieve lower maintenance costs.

What is the main reason for buyers considering purchasing a fixer-upper?

Buyers want to make a home uniquely theirs, with nearly 70% considering purchasing a fixer-upper to allow them to start with a clean slate.

What percentage of respondents would consider purchasing a home with a friend or family member?

27.7% of respondents would consider purchasing a home with a friend or family member.