The FINANCIAL -- 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 on April 28. 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."