Three-quarters of homebuyers who plan to buy a home within the next 12 months say the pandemic has affected their homebuying plans, according to a survey conducted by Redfin. In addition, 25 percent of homebuyers reported the pandemic has caused them to move — or speed up their moving timeline.
Sixteen percent of respondents said the pandemic has caused them to want to move, and 15 percent said it’s made them want to move sooner. Meanwhile, 6 percent of respondents chose both of these options, resulting in the 25 percent total who have moved and/or sped up their timeline because of the pandemic.
The survey of more than 1,000 people who are planning to buy a home within the next 12 months also found that 20 percent of respondents delayed their moving plans as a result of the pandemic and 17 percent of respondents are now seeking out a less expensive home.
“Somewhat counterintuitively, the coronavirus-driven recession is propping up the housing market,” Redfin Chief Economist Daryl Fairweather said in a statement. “Homebuyer demand is surging despite GDP taking a historic nosedive in the second quarter, largely because Americans value the home more than ever and are willing to prioritize housing even as they cut back on other expenses. Additionally, the Fed is using low interest rates to stimulate the economy, which is giving buyers more purchasing power and boosting home sales. But even with low rates, widespread unemployment and financial uncertainty mean not everyone who wants to buy a home is able to.”
A desire to capitalize on low mortgage rates and more time spent at home are both significant factors impacting homebuyers’ decision to move. Fifty-five percent of survey respondents who said the pandemic is causing them to move or move sooner said that low mortgage rates were a factor in their decision. Meanwhile, 52 percent said spending more time at home was a factor in their decision and 40 percent said working from home has impacted their desire to move.
At the time Redfin’s survey was sent out — July 19-21 — the average 30-year mortgage interest rate was 2.98 percent, a historical low.
In terms of desired home features, most respondents indicated a preference for more space, a desire spurred by the need to stay at home more often. Twenty-one percent of respondents said they want a designated work-from-home space, and the same percentage said they wanted more outdoor space. Furthermore, 10 percent of respondents said they want a bigger home and 7 percent want a designated space for their kids to learn from home.
With widespread low inventory, competition in the market has driven up sale prices and resulted in bidding wars: The median sale price was up 11 percent year over year during the week ending July 26, and more than half of Redfin offers resulted in bidding wars for the third month in a row during July.
“Mortgage rates are up there on the list of what’s driving people to buy,” San Francisco Redfin agent Dylan Masella said in Redfin’s report. “A lot of people are nervous about the pandemic and feel their apartment walls closing in on them. I’m working with one couple that was renting a small apartment and they were both working from the kitchen table. The combination of needing more space and low rates pushed them toward buying, and they just closed on their first home.”
Those individuals who are now delaying plans to move reported doing so because of economic uncertainty. Forty-five percent of respondents who are delaying their move cited financial concerns as a factor in their decision.
