Homebuying still American dream in PA
Homebuyers in Pennsylvania are still living the American dream.
A new survey conducted for the Pennsylvania Association of Realtors® (PAR) shows that 59 percent of buyers indicated they want to live in their recently-purchased home for at least 15 years, and 46 percent hope to live in their new home for more than 25 years.
“These results show that buying a home is still the American dream,” said PAR President Ron Croushore. “Consumers understand that owning a home is the foundation of financial stability because it helps build family wealth and strengthens communities.”
Results were taken from PAR’s new consumer survey project called Welcome Home.
Scott Detweiler, president of the Fayette Board of REALTORS®, said the trend here shows that most people are buying a home with the intent to stay in it longer.
“Generally most people are (staying) unless they have a need to downsize or move when they get older.”
Keystone Analytics®, is conducting the PAR survey on a quarterly basis to provide information on a number of consumer buying trends specific to the commonwealth such as financing products used in the transaction, reasons behind the home purchase, and challenges faced with the buying process.
Based on her experience, Claudette Franks, real estate agent at SWC Properties in Uniontown, said about 50 percent of past clients are expecting to stay in their homes for 15 years or more.
According to Franks, the most exciting client to work with is a first time buyer, which typically are young individuals or couples that are ready to start a new chapter in their lives.
“When looking for properties for these clients to view I search out homes that will have the space for their family to grow,” said Franks.
Tom Simon, real estate broker and owner of Howard Hanna Real Estate Services in Belle Vernon said, depreciation and financing losses in the housing market have kept people from moving up.
“There’s no doubt people are staying longer.”
“It’s a cycle,” said Simon. “When times are bad people hunker down, when times are good people take chances.”
A 30-year traditional mortgage remains the preferred way to finance a home purchase indicated by 47 percent that took part in the survey.
Detweiler said traditional mortgages remain the most popular, especially for people age 20 to 30, because they don’t require a 20 percent down payment like other loans.
For seniors, Detweiler said conventional loans are a better choice over reverse mortgages, which has no income or credit score qualifications.
Instead, the age of the borrower, the home value, and the expected interest rate are used to determine the loan amount.
” I think people around here are more conservative,” said Detweiler.
In Fayette County, Franks said there are a number of rural areas that are eligible for home loans offered through the U.S. Department of Agriculture (USDA).
The program, backed by the federal government, is designed to help families looking to own a home in qualifying small communities or rural areas outside the city limits with a population of less than 20,000.
Rural home loans accommodate low-to-moderate income levels based on family size that varies by state and county.
“This is a type of loan that requires the least out of pocket expenses for the buyer, which in turn makes it more affordable for more first time buyers,” said Franks.
Cash purchases were the most common purchase method of retired people that participated in the survey.
The survey also showed that Federal Housing Administration (FHA) loans are an important option for first-time buyers with about one in 6 under age of 35 indicating they used an FHA loan to purchase their home.
A new FHA policy backed by the National Association of Realtors® that lowers the cost of mortgage insurance premiums made earlier this year revealed an average savings of $900 a year for future homeowners.
The survey also found that:
n Relocation was the most common mentioned response for the main reason to buy a new home along with people tired of renting, downsizing, expanded family, recently married, education/schools, second home, and higher income.
n Homebuyers with children are almost 10 times more likely to say schools were their most important reason to move.
n More than half indicated they paid close attention to property taxes during their home search, with females indicating a lower property tax bill was “one of the biggest reasons” they decided to buy a new home.
n The use of online resources for home searches for those surveyed lags the national average.
The survey is expected to continue quarterly over the next three years to track trends of Pennsylvania homebuyers.