Community News

Buyer's remorse is a term often used in any type of large ticket item purchase to insinuate that once the acquisition is complete, the consumer begins the process of "what if" in their mind. What if something of better quality or price comes along? What if other people don't think it's a good idea? And though the phrase comes up on a regular basis, a new study published by Bankrate, Inc. finds that 90% of homeowners report they have no regrets about buying their current home. Of those who responded that they did have second thoughts, it was mainly due to either their inability to sell their home in order to move to a new area or to a different home, or that their mortgage payments were no longer affordable.

This is quite enlightening in a national market of stagnant or falling home prices. It is somewhat intuitive to know that homeowners in the more stable markets who have not gone through the most recent and volatile boom and bust cycle would be comfortable with their purchase decision, but this extremely high approval rate extends even to markets that have seen equity slipping away.

While homeowners appear to be satisfied, they are also much more aware of what they are getting into mortgage-wise than they were in years past. Only two years ago, 26 percent of respondents to a Bankrate survey admitted they truly did not know the terms of their mortgage. This number has dropped to 8 percent, showing that buyers are becoming more savvy and realize they need to understand the details of their mortgage beyond simply what the monthly payment amounts to. Further, this increased knowledge has led to greater popularity of fixed-rate mortgages, with 79 percent of all respondents reporting this was their current mortgage type and 90 percent of respondents who earn over $75,000 annually choosing this route.

Another study worth noting is from Fannie Mae which reported: "70 percent of consumers see a home as one of the safest investments to make and 64 percent think now is a good time to buy." Prices and selection of inventory are still quite remarkable in most parts of the country and mortgage rates are more than enticing.

The 2010 National Association of Realtors® Buyers Survey gives a deeper look at buyer activity that took place in 2009. First, existing home sales increased from 4.9 million units in 2008 to 5.2 million units in 2009. However, new home units declined from 485,000 in 2008 to 374,000 units last year. These figures correlate to existing homes making up 72 percent of the purchases versus 28 percent being new construction.

Next, the composition of home buyer usage has also shifted. Of the residential property buyers, 73 percent purchased homes as primary residences, up from 70 percent in 2008, and an even larger increase from 60 percent in 2005. First-time home buyers comprised 54 percent of this category of buyer which is most likely due to the attractive First Time Home Buyer Tax Credit of up to $8,000.

Finally, there are a few other miscellaneous yet interesting statistics of value regarding primary residence purchases. The median sales price declined by 5.6 percent to $185,000. The percentage of home buyers who paid cash for their property remained steady at 15%. The median buyer's age was 33 years with a median household income of $72,900. Eighty-five percent bought a detached, single-family home versus condos, townhomes, etc. And even more than the Fannie Mae survey, 75 percent feel that it is a good time to purchase a home.

Purchasing a home is most certainly one of the greatest decisions in an adult's life, so it is comforting to know that even in trying times, homebuyers still realize there is no place like home.