Regardless of age, people still want to buy homes.
That’s the takeaway from a new report from ServiceLink, a provider of digital mortgage services to the mortgage and finance industries.
The 2023 ServiceLink State of Homebuying Report (SOHBR) analyzes generational trends among recent homebuyers, their sentiment about today’s housing market, and the role technology plays throughout the process. The survey features insights from 1,000 homeowners who either purchased or tried to purchase a home within the past three years.
According to the report, 52% of all respondents, across all generations, said they plan to consider buying a home.
“Even with the ups and downs in today’s housing market, there is still a strong desire among several generations to obtain homeownership,” said Dave Steinmetz, ServiceLink’s president of origination services. “Our latest study suggests there are many homeowners and homebuyers who are ready to make their mark in the real estate market this year; whether it’s to purchase a new home or take out a home equity loan. This indicates there is an opportunity for lenders to provide more education and resources to buyers and homeowners to guide them throughout their homeownership journey.”
The survey’s key findings include:
- Despite shifting market conditions, more than half (52%) of all respondents said they plan to consider buying a home.
- Of those respondents, 61% of millennials said they plan to consider buying a home, vs. 25% of Gen X, 12% of Gen Z, and 2% of baby boomers.
- 21% of surveyed homeowners reported having over $100,000 worth of equity in their home, followed by a combined 41% who said they have between $50,000 and $99,999 in tappable equity.
- 44% of homeowner respondents plan to take out a home equity loan this year, as compared to 11% who said they don’t know enough about home equity loans to consider them.
- Of those homeowners, 49% of millennials said they are likely to take out a home equity loan, compared to 44% of Gen X, 41% of Gen Z, and 12% of baby boomers.
- 73% said they plan to use the money to make home improvements, while 20% plan to use the money to pay off debt, including student loans.
- Almost half (49%) of respondents considered buying a new home in the past 12 months, but ultimately decided against it, more than double the 24% who said that in the 2022 SOHBR.
- Of those who considered buying but decided against it, millennials led all generations at 58%, followed by 24% of Gen X, 13% of Gen Z, and 4% of baby boomers.
- Over half of these respondents (56%) said options were too expensive, compared to 44% in the 2022 SOHBR.
- Additionally, 48% of this group said high mortgage rates were a main factor for hitting pause on the home search, as compared to 29% in the 2022 SOHBR, who said their financial situation changed and 28% who cited low housing inventory.
- The survey also found that more home buyers are considering alternative paths to homeownership:
- 40% of respondents would consider buying a home at auction, compared to 33% of respondents in the 2022 SOHBR.
- Of those who said they would consider buying a home at auction, Gen X ranked the highest among all demographics at 46%, followed by millennials (39%), Gen Z (39%), and baby boomers (30%).
- The potential use for a home purchased at auction included primary residence (50%), rental income (23%), and fix and flip (20%).
In addition, the survey found that more home buyers want to leverage technology to improve the home-buying experience:
- Convenience/ease of use (63%) and time savings (59%) prove to be the biggest benefits of using technology in the homebuying process, across age and gender. This is similar to the results of the 2022 SOHBR, in which 72% cited convenience/ease of use and 60% cited time savings.
- Even though 41% of baby boomers said technology did not play a role in their mortgage process, 77% of that demographic said convenience/ease of use was the top benefit of using tech, compared to 65% of millennials, 65% Gen X, and 42% of Gen Z)
- A combined 68% of respondents said they are “very willing” or “willing” to submit videos or photos of their home for a virtual inspection, compared to a combined 13% who said they are “not very willing” or “not willing at all.”
The 2023 ServiceLink State of Homebuying Report survey was completed online among a panel of potential respondents who purchased a home, or tried to purchase a home, in the past three years. A total of 1,000 respondents, age 18 and older, completed the survey. Interviews were conducted by Sago from Jan. 7-13, 2023.
