BANK OF AMERICA CORPORATION From Moonlighting to Compromises, Homebuyers Are Finding Creative Ways to Achieve Homebuying Aspirations
CHARLOTTE, N.C., April 28, 2022 /PRNewswire/ -- Home purchases show little sign of slowing during this Spring homebuying season, characterized by surging demand and low inventory. Homes are being snapped up quickly, with two-thirds (65%) of prospective homebuyers saying they would make an offer within three days of viewing a home, and 20% saying they would make an offer immediately. This is according to the annual Bank of America's 2022 Homebuyer Insights Report, which explores how homebuyers are navigating an ever-changing homebuying market.
Homes spent an average of 25 days on the market in February 20221, less than half as long as two years ago (56 days), despite the fact that more than half (56%) of prospective homebuyers surveyed report being hesitant to purchase due to high home prices, which are expected to increase 10%2 by the end of 2022.
To put themselves in a better financial position to purchase a home, many buyers are getting creative in the ways they're saving. Whether turning a passion into moonlighting or taking on freelance work, Bank of America found that the majority of homebuyers (56%) are willing to consider a second job to earn supplemental income for a home purchase. For instance, approximately one-third of prospective homebuyers would consider starting an online store to sell handcrafted pieces (34%) or selling some of their belongings (31%) to save for a home.
"Whether your next step is to build your savings or apply for a mortgage preapproval – the more informed you are about the market and purchasing process, the more able you'll be to put your best foot forward when pursuing a home," says Matt Vernon, head of retail lending for Bank of America. "There's no denying the challenges of today's homebuying market. We're helping many consumers make informed financial decisions on their path toward homeownership."
A home is one of the most expensive purchases most people will make in their lifetimes, and it requires careful planning. Today, more than half (53%) of prospective homebuyers intend to buy a home according to their original timeline (41%) or sooner than they originally intended (12%).
To make their dreams of homeownership a reality, prospective homebuyers are willing to compromise to reach this goal, such as:
- Moving to an up-and-coming neighborhood (82%)
- Buying a home further from entertainment, restaurants, and shopping (79%)
- Buying a smaller home (71%)
- Forgoing outdoor space (70%)
However, there are limits to what prospective homebuyers will sacrifice to purchase a home. Fewer than half of prospective homebuyers (46%) would sacrifice privacy; more than one-third would rather spend money on clothing or accessories (35%) and travel (34%) than save more for a home; and 26% would rather save less for a home than give up their self-care routines, such as trips to the salon or getting a massage.
As they surpass baby boomers as the nation's largest adult generation, millennials are a driving force behind today's competitive homebuying market. This group now represents the largest cohort buying homes3 and faces unique motivations and pressures. One-third (34%) say they feel the pressures of adulthood, meaning they feel like they should be buying a home at their age. Over half (53%) are motivated by the desire to set down roots for their growing family, and 43% want to start building home equity.
This generation is navigating homebuying on their own terms. Less than one-third (29%) would seek financial help from their family to buy their home. However, millennials would consider:
- Delaying their home purchase timeline to save more money (51%)
- Increasing their initial budget (46%)
- Sacrificing their preferred location in favor of finding the perfect home (43%)
- Building their own home (36%)
"We're helping clients reach their financial goals every day, and we know building their personal wealth through homeownership is one of their biggest priorities," shares AJ Barkley, head of Neighborhood and Community Lending for Bank of America. "That's one of the reasons why the Bank of America's Community Homeownership Commitment® was created, to help would-be buyers overcome the upfront costs of homeownership."
When combined, Bank of America's Down Payment Grant and America's Home Grant® programs offer eligible homebuyers up to $17,500 for down payment and closing costs, no repayment required. Learn more about Bank of America's commitment to supporting clients on the journey to homeownership, including the Homebuyer Insights Report as well as financial education and affordable homeownership resources.
First launched in 2019 as a $5 billion initiative and tripled in 2021 to a $15 billion commitment through 2025, the Bank of America Community Homeownership Commitment® helps low- and moderate-income homebuyers across the country begin to build their personal wealth and family legacy through the power of homeownership.
With one of the most generous grants in the industry, Bank of America offers up to $17,500 in combined down payment and closing costs grants.
- Down Payment Grant program helps buyers overcome one of the biggest barriers to homeownership – down payment. In more than 260 cities and counties across the country eligible buyers can receive 3% of the home's purchase price up to $10,000, whichever is less, to be used toward their down payment. No repayment is required.
- America's Home Grant® program offers a lender credit of up to $7,500 that eligible buyers can use towards non-recurring closing costs, like title insurance and recording fees, or to permanently buy down the interest rate. The funds do not require repayment and can be combined with funds from the Down Payment grant program listed above.
Sparks Research conducted a national online survey on behalf of Bank of America between February 18 and March 8, 2022. Sparks surveyed a national sample of 2,000 adults ages 18+ who currently own a home or plan to in the future. The margin of error for the national quota is +/- 2.2 percent at the 95 percent confidence level. Select questions allowed respondents to choose more than one answer, resulting in responses that may equate to more than 100 percent.
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with more than 54 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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Susan Atran, Bank of America
Phone: 1.646.599.3300
susan.atran@bofa.com
1 Redfin Data Center: Median Days on Market
2 BofA Global Research: Housing Watch
3 National Association of Realtors: Home Buyers and Sellers Generational Trends
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SOURCE Bank of America Corporation
