How The COVID-19 Pandemic Affected Millennial Home Buyers
Although the COVID-19 pandemic brought many aspects of public life to a standstill, for nearly half of millennial home shoppers, it accelerated their buying timeline. The nation’s largest generation surged into the buying market, thanks to record-low mortgage rates and stay-at-home orders, which gave them the opportunity to save up for a down payment. But that doesn’t mean that their path to homeownership was free of hurdles.
Here are some of the key ways the pandemic affected millennials’ home-buying experience.
Long searches and many house tours
Despite being known as the instant gratification generation, many millennial home buyers had to exercise patience during the pandemic. Nearly half of the surveyed respondents (42%) spent six months or longer on the home search, with over half (57%) visiting more than 20 homes.
What made the house hunting process so arduous? The historically low inventory. Many homeowners who planned on selling during 2020 had second thoughts about making big money moves during such an uncertain period.
What’s more, the thought of opening their doors to strangers for staging, viewings, or inspections during a global health crisis was unsettling. Fewer homes on the market meant home shoppers had fewer options—and a lengthier home search.
Multiple offers and paying over asking price
Once millennials did zero in on a home they liked, many had to jump in amid competing offers and go over asking price to land the home.
The survey by Angi revealed that two-thirds of millennial home buyers put in at least four offers before making a winning bid. One-third paid over asking price, and 35% went over budget with their offer.
“Nearly every home sold during the pandemic went into a multiple-offer situation due to low supply and incredibly high demand, thus resulting in a majority of buyers having to pay over asking on homes,” says Ivan Estrada, a broker associate and CPA, Ivan Estrada Properties, with Douglas Elliman Real Estate. “Especially for first-time home buyers and millennials, their typical price point of under $2 million caused them to face a lot of competition.”
Buying homes requiring renovations
Most buyers start their home search knowing whether they want to buy a move-in ready property or a fixer-upper into which they’d put in some work. But some millennials in search of turnkey homes during the pandemic had to settle for places that needed more TLC than they had initially wanted to take on.
According to the survey, 56% of millennials bought a home requiring minor or major renovations, although only 42.4% began their search with that intention.
“The biggest reason why they’re pushed to buying houses requiring renovations is because of the price point,” says Estrada.
Renovated homes in desirable neighborhoods will always be more expensive than fixer-uppers, and that can put many homes out of the financial reach of millennials.
The survey also found that if buyers didn’t exceed their budget in the cost of the home they bought, they were more likely to do so in expenses for renovations. Nearly half (46%) of all respondents went over budget on renovations within the first year of ownership.
There’s no denying that COVID-19 reshaped what we want in home design, and that led some homeowners to opt for certain features and amenities, regardless of price.
Comfort and cleanliness have never been a higher priority for homeowners, and upgrades like bigger pantries, hands-free light switches and faucets, closed HVAC systems, and nicer home offices are now seen as crucial features.
Text by Ana Durrani | Photo by Getty Images | Read More Here