When reviewing a survey that was conducted about a year ago, it reminded me of what really drives potential homebuyers to make that home purchase. In light of the fact interest rates may start rising again, what effect would that have on the real estate market during a recovery, or any time for that matter.
The survey, conducted by Lawyers.com, although small in comparison to other surveys, does highlight the reasons potential homebuyers primary motivators are in the purchase of a new home. And believe it or not, at the bottom of the list is what the interest rates are. In fact, interest rates were the primary motivation in only 4 percent of those surveyed.
The top five motivators in their purchases were:
25 percent of those surveyed said that a life change such as a retirement, relocation, new baby or divorce is the primary motivator for buying a new house.
18 percent stated they sought a bigger house or more property.
16 percent were eager to become homeowners because of the investment value.
12 percent wanted to buy in order to avoid the restrictions of renting.
7 percent cited the tax benefits of homeownership as a motivating factor.
The survey also questioned how the purchasers felt about the home buying process. The majority responded that they thought the home buying process was very confusing. 51 percent of the respondents said the legal elements were confusing, 22 percent said they were not clear on the various fees associated with the transaction, and 15 percent said they did not uderstand the documents at the closing.
If you want to be a "trusted" advisor, you will need to address these issues in your practice.
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Robert....some good points. I think us lenders would think people would focus more on the rates, because this is what they cry to us about. What is your lowest rate.
But I can see where this would be on the lower end after the fact. I think one that would be higher up than rates would be the actual payment. Rate doesn't really mean anything. It's the payment that counts.