The coronavirus pandemic — coupled with historically low mortgage rates — is motivating 53% of homebuyers to purchase a home in the coming year, according to the results from LendingTree’s latest survey of over 1,000 prospective homebuyers.
Key Findings:
- 53% of homebuyers say they are more likely to buy a home in the next year due to the coronavirus outbreak.
- 73% of those who are more likely to purchase a home are first-time homebuyers, and 66% are millennials
- For all prospective homebuyers planning to purchase in the next 12 months, the top motivators are:
- Taking advantage of record-low mortgage rates (67%)
- Being able to save a larger down payment due to reduced spending amid COVID-19 (32%)
- Reduced home prices (30%)
- Being confined in a smaller space during stay-at-home orders makes homeownership more appealing (28%)
- Nearly two-thirds (65%) say the coronavirus pandemic has impacted how much money they plan to spend on a new home
- 44% plan to buy a less expensive home, 21% a more expensive home
- 61% have toured a house virtually over the past two months
- Another 33% said that although they haven’t had a virtual tour, they plan to do so.
3 tips for buying a home during the COVID-19 pandemic
- Improve your creditworthiness. Some mortgage lenders are requiring a minimum 700 credit score to qualify for a home loan. Having a score of 740 or higher may help you get the lowest available mortgage rate.
- Reduce outstanding debt. The lower the debt-to-income (DTI) ratio — the percentage of gross monthly income used to repay debt — the better the chances of qualifying for a mortgage. The rule of thumb is a 43% maximum, but aiming for a 36% DTI ratio is more manageable.
- Consider holding off for a few months. It may be wise to wait until late summer or fall to buy a home, as we may later see more homes in the market.
For more information about the survey and its findings, please visit: https://www.lendingtree.com/home/mortgage/more-than-half-of-homebuyers-plan-to-buy-despite-coronavirus-pandemic/
Methodology
For this survey, LendingTree commissioned Qualtrics to conduct an online survey of 1,006 homebuyers, with the sample base proportioned to represent the overall population. The survey was fielded April 24-30, 2020.
We defined generations* as the following ages in 2020:
- Millennials: ages 24-39
- Gen X: ages 40-54
- Baby boomers: ages 55-74
Our survey also included responses from members of Generation Z (ages 18-23) and the Silent Generation (ages 75+). Their responses were factored into the overall percentages, but excluded from the generational breakdowns due to the low sample size among both age groups.
