Tuesday, November 9, 2010
NEW ORLEANS-Despite the housing crash, most American homebuyers still think they are making a smart financial move. But recent homebuyers have become a tad more conservative in what they buy and how long they plan to stay in their new homes.
"Not surprising, the median price is down a little bit and so is the median size of homes purchased," said Paul Bishop, research vice president for the National Association of Realtors. "Eighty-five percent of homeowners say their purchase of a home is still a good finance investment, and nearly half think the investment is better than stocks."
Buyers are planning to stay put longer, another reflection of today's slower-paced home market.
"The tenure of home ownership has increased in the last few years," Bishop said.
First-time owners now say they want to own their homes for a decade, and repeat buyers are aiming for 15 years.
The Realtors surveyed thousands of homebuyers across the country who purchased a house between summer 2009 and mid-2010. The results were released at their conference this weekend in
Lower home prices and interest rates appear to be luring some consumers into the housing market.
About 30 percent of buyers polled said they made the purchase because they thought the timing was right to get an affordable home.
And there were a record number of first-time home buyers – totaling 50 percent of all purchases. That's up from 36 percent in 2006, the Realtors found. "The number of first-time buyers had been slowly trending up," Bishop said.
Almost 90 percent of homebuyers start with the Internet to find a new home. That's slightly more than the number of consumers who say a real estate agent is their top choice for home shopping.
In 2003, only 71 percent of homebuyers said they shopped the Internet at all and only 42 percent said they did so frequently.
Buyers are also taking much longer to pull the trigger on a deal. During the last year, home purchasers looked for a dozen weeks on average. In 2001, the average time of a home search was seven weeks.
With almost 4 million homes for sale across the country, buyers say finding the right property is the toughest obstacle.
While housing data suggest that about a third of current home sales are distressed properties, only about 4 percent of recent buyers Realtors surveyed said they bought a foreclosed house. That's down from 10 percent in 2009.
The Realtor survey only looked at buyers who planned to occupy their homes, not investors.
Getting the money to finance that house is harder.
About 10 percent of recent buyers say they were rejected by lenders one or more times before finally arranging financing. And 40 percent said the loan process was tougher than they expected.
And sellers have to do more to unload their property.
More than half of sellers said they had to cut the price of their home to land a sale. More than 30 percent said they had to lower the price two or more times.
Forty-four percent of the recent sellers said they had to use some kind of incentive such as a home warranty or help with closing costs to land the deal.