Younger American adults may feel like they need a golden ticket to buy a home, but they’re nonetheless undeterred and remain optimistic about becoming homeowners soon, according to new survey data from Bank of America.
The bank’s recently released 2023 Homebuyer Insights Report, based on a nationwide survey conducted from March 29 to April 3, revealed that 55% of potential homebuyers view this year’s market as more competitive than last year’s. That’s not surprising, given the rise of interest rates over the past several months coupled with still-short supply. Fifty-one percent view high prices and interest rates as a challenge to buying. Thirty-nine percent believe this is a seller’s market, compared to 18% who think it favors buyers and 31% who say it’s neither.
Many respondents to Bank of America’s survey, however, remain undiscouraged by such perceptions. Fifty-four percent of poll participants either plan to speed up their home purchase decision or buy when they originally planned. This share rises among younger prospective buyers, including 62% of Gen Zers and 55% of millennials. Fifty-six percent of Gen Z and 56% of millennial homebuyer hopefuls are planning to purchase in the next two years.
For these would-be buyers, wealth building is a big motivator. Almost half (47%) of all potential buyers would buy a home in the current market because they are tired of renting and the associated rent increases. Twenty-eight percent of respondents said they want to start building equity.
And even while on the sidelines, hopeful buyers are staying active and engaged. Per Bank of America’s survey, 67% of potential buyers are “actively looking” at homes. Fifty-two percent are scrolling housing marketplace apps with a certain budget in mind. Sixty-five percent of respondents who scroll through listings are interested in what their current budget would get them if they were to buy a home today. Thirty-one percent are “visiting open house events for fun.”
“The market is less frenzied as rates have moderated, and that may be impacting perception,” said Matt Vernon, head of retail lending at Bank of America. “And low inventory is still creating a highly competitive environment. Homebuyers are doing the right thing by taking time to understand the market, weigh their priorities and determine what fits into their budgets.”