The number of homebuyers looking to downsize from their current home is trending downward, while those looking to upsize has increased, according to a recent Welcome Home survey conducted for the Pennsylvania Association of Realtors®. Homebuyers looking to downsize decreased to 8%, from a high of 18% in 2017, while those who wanted to upsize increased to 15% from a low of 7% in 2016.
“As fewer homeowners are downsizing, it’s making it harder for families to purchase larger homes,” said PAR President Bill McFalls Jr. “When one area of the market stalls or declines, it creates a ripple effect. The lack of larger homes in a market where there is an increased demand for them makes it harder for buyers to purchase the home they need for their families.”
For buyers, this may mean a faster-paced and more stressful home buying experience. “Those surveyed said that the two greatest stressors when buying a new home were paperwork or selling a prior home,” McFalls noted. “That’s more than doubled in the last two years of the survey. It shows that buyers have to identify the house they want more quickly and if they already own a home, they have a shorter time to sell their previous home to avoid paying two mortgage payments.”
The survey also showed that the use of the Federal Housing Administration loans is increasing among first-time homebuyers since the fourth quarter of 2016. The study again confirmed that the most popular financing tool continues to be the 30-year mortgage, with nearly 50% of homebuyers choosing it.
“The use of FHA loans has continued to increase for first-time homebuyers,” McFalls said. “These loans are designed for low-to-moderate income borrowers, require a lower minimum down payments and lower credit scores than many conventional loans.”