Homebuyer Buzz: Young Adults Putting Pandemic Savings Toward Down Payments
July 6, 2021
Homebuyer Buzz is our monthly round-up of news stories related to the latest in homebuying trends — from the evolving wants of homebuyers to design news and more.
In this Buzz, we look at how likely young adults are to put pandemic savings toward down payments (turns out it’s likely), and what we can expect from millennial homebuyers moving forward. We also check in on consumer confidence — at its highest level since March 2020 — and dig into the most popular outdoor design trends.
Will millennials usher in a Roaring 20s?
Will we ever stop talking about millennials? Likely not, when the pandemic has accelerated the “Roaring 20s” of millennial homeownership, according to First American. In 2020, potential homeownership demand improved by 3.5 percentage points for millennials, which is the largest increase among major generational groups. It doesn’t hurt that the majority of millennials turned 30 in 2020 and will soon be hitting key points in their lives, like getting married and having children, increasing the likelihood they’ll want to buy a home. [First American]
Young adults likely to put savings toward down payment. It’s also likely that these same millennials (and some Gen Zers) will put savings from the pandemic toward a down payment. That’s according to Zillow, at least, which found that about 3-in-5 young adults plan to use their pandemic savings toward down payments. While not all young adults were able to keep their jobs, of the more than 1,200 people Zillow surveyed, 83% said they saved money in at least one spending category during the pandemic. [Zillow]
Consumer confidence reaching pre-pandemic levels
Consumer confidence rose to its highest level since March 2020. The latest Consumer Confidence Index approached pre-pandemic levels in May, with the share of consumers planning to purchase cars, homes and appliances increasing across the board. The share of respondents who rated business conditions as “good” increased by 4.6 percentage points, while the outlook on the labor market was also more favorable. Concerning homes, the share of respondents who said they were planning to buy a home in the next six months rose to 6.1% in June. [Eye On Housing]
New listings on the horizon
The market welcomes new listings in June. Housing inventory could be getting a needed boost as more houses came on the market in June, according to Realtor.com’s Monthly Housing Report. While inventory is still down, June saw a 43.1% decline over 2020 numbers compared to May, when there was a 50.9% year-over-year decline. New listings increased 5.5% year-over-year and 10.9% over last month. [Builder and Developer]
Buyers sacrifice shorter commutes for larger homes
People are moving further from cities for more space. A Realtor.com survey found that homebuyers are willing to sacrifice their commuting time for a larger home further away from big cities. For many, buyers are likely expecting to continue to work from home, so lengthier commutes aren’t as much of a drawback when they aren’t driving in every day. The same survey found that buyers want a quiet location with an updated kitchen, as well as a garage and backyard. [Realtor.com]
iBuying somewhat rebounds in 2021
More buyers purchased through an iBuying company in Q1 2021. iBuyer home purchases were up 20.6% from the fourth quarter of 2020 in Q1 2021. Purchases were still down 6.1% from a year earlier. That represents 4,383 homes that were purchased through iBuying companies. As a general note, many firms put iBuying on hold at the start of the pandemic. [Redfin]
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Make no mistake about outdoor trends
Builder rounds up eight outdoor features homeowners are craving. What do people want in their outdoor space? Builder magazine, and several other publications, think they know. Topping Builder’s list is outstanding outdoor kitchens, with built-in entertainment and fire features following. Fixr’s 2021 Trends for Outdoor Living Spaces said 61% of respondents ranked outdoor kitchens as the most popular feature. For builders, or homeowners, on more of a budget, the list also ranks seating areas and gardens as hot features. [Builder]
Forbes also agrees on kitchens and fire pits for the best outdoor design trends. In addition to those two, Forbes sings the praises of broken plan layouts, outdoor speakers, lots of greenery and the color yellow. Forbes also emphasizes the appeal of painted details, like pink picket fences, which might just be a decision better left to homeowners and their individual aesthetic. [Forbes]
The most-searched outdoor décor trends include indoor-outdoor spaces. Also making Realtor.com’s list? Concrete furniture, outdoor kitchens, pastels and mini gardens. It’s clear outdoor kitchens are popular and home builders who have the clientele for such additions would do well to incorporate a pizza oven, outdoor appliances or even simply an outdoor bar in appropriate floorplans. [Realtor.com]
General features homebuyers are demanding include steam ovens. Topping Real Simple’s list of eight features homebuyers are demanding (with input from NAHB and Zillow) is the steam oven. In second place is the curbless shower, followed by the pizza oven and modern farmhouse style. Not as glamorous as an outdoor kitchen, but arguably more practical is the second half of the list which includes laundry rooms, exterior lighting and ceiling fans, indicating that homebuyers like highly functional features. [Real Simple]
