Uncertainty among current homeowners and prospective buyers has reached a three-year high.
Three in five homeowners and prospective buyers cannot tell whether now is a good time to buy a home or not, according to the latest Bank of America Home Buyer Insights Report. Just two years ago, the share of respondents uncertain about whether it was a good time to buy was 48%.
In spite of the uncertainty, 52% of prospective buyers are optimistic about the state of the home buying market, saying the current market is better than a year ago. Three of four prospective buyers expect prices and interest rates to fall and are waiting until then to buy a new home.
“With so many factors impacting the home buying market, prospective buyers and current homeowners are left wondering what it all means for them,” says Matt Vernon, head of consumer lending at Bank of America. “As our research shows, a majority of buyers feel the market is headed in the right direction, but many are still planning to wait for more favorable conditions before they decide to take action.”
Generational Compromises
Despite financial hurdles and affordability concerns, the dream of home ownership remains strong for both Gen Z and Millenials. However, the younger generations—particularly Gen Z—are having to make compromises and strain to achieve their goals.
Three in ten Gen Z homeowners reported they paid for their down payment by taking on an extra job, up from 24% in 2023. Twenty-two percent of Gen Z homeowners purchased their home with siblings, compared to 4% as recently as 2023.
Among prospective Gen Z buyers, 34% would consider living with family or fields while waiting to purchase a home and 21% anticipate a down payment will be funded by a loan from parents or family members.
“Even with the challenges they face, younger generations still understand the long-term value owning a home offers them and many are doing what it takes to get there,” says Vernon. “They are finding creative ways to afford down payments and working hard to improve their financial futures.”
Weather Patterns Influence Buyers
Approximately 62% of current homeowners and prospective buyers are concerned about the impact of severe weather and natural disasters when it comes to home ownership. Seventy-three percent feel it is important to buy in areas with lower risk of such weather events occurring.
Nearly two in five homeowners and prospective buyers shifted their preferred purchasing location due to the risk of severe weather. The shift comes from personal experience, as nearly a quarter of homeowners have experienced property damage or loss in the last five years due to severe weather events.
Sparks Research conducted the Bank of America Home Buyers Insights Report by surveying 1,000 homeowners and 1,000 renters.
