You may want to dust off your marketing outreach and get ready to target first-time home buyers once again. The 2017 housing market is looking bright, fueled by a big wave of first-time home buyers emerging.
First-time home buyers are predicted to make up more than half of home buyers next year – up to 52 percent, surging from 33 percent in 2016, according to realtor.com®’s Active Home Shopper Report, based on survey data from buyers who plan to purchase homes in the spring or summer of 2017. Also, realtor.com® predicts that will spark greater demand for suburban homes in the new year.
Check out our round-up of housing predictions for 2017.
Millennials are finally expected to unleash their buying arm in 2017. They are predicted to make up 61 percent of the first-time home buyers under age 35 in the new year. The top motivators getting millennials moving now are getting married or moving in with a partner, growing tired of their current living space, and planning to increase their family size.
“This represents an ‘oh shift’ moment in housing,” says Jonathan Smoke, realtor.com®’s chief economist. “With so many first time buyers in the market, competition will be even fiercer next year for affordable starter homes in the suburbs. Those looking to buy may want to consider a winter home purchase in order to avoid bidding wars and higher prices spurred by a potential increase in millennial buyers.”
Indeed, affordability will remain a pressing concern in 2017. In 2016, 40 percent of home buyers said lack of inventory was their biggest barrier to home ownership. But in 2017, the main barrier is expected to shift to affordability and mortgage qualification, realtor.com®’s research team finds. Thirty-seven percent of first-time home buyers who plan to buy next spring said their largest impediment to home ownership is saving for a down payment; another 30 percent said finding a house within their budget would be their biggest hurdle.
Many first-time buyers are setting their sights on suburbia. Forty-three percent of first-time home buyers say they prefer to buy a home in the suburbs, citing greater security, privacy, and a better fit for growing families.
Overall, the top cited features first-time buyers say they want in new homes is safety, increased living space, and larger yards. Millennials also show the highest preference for moving to a single-family home (39%) and townhome (34%), and are showing decreased desire for a multifamily home (15%), condo (10%), or mobile home (2%), according to the realtor.com® survey.
What’s more, they’re motivated to buy in order to improve their financial situation. They say they want to purchase a house that will create a financial investment for them that they can grow over time.
Source: “Realtor.com® September Home Shopper Surveys Point to Big Shift Ahead,” realtor.com® (Oct. 17, 2016)