Homebuying has changed dramatically over the course of the coronavirus pandemic.
Along with changes to the process of physically buying a home, homebuyer sentiment has also altered significantly over the past few months, from largely positive feelings before the start of 2020 to mostly negative ones in the ensuing months. The 2020 homebuyer is more than twice as likely to feel anxiety than homebuyers who purchased in the last five years, according to a recent study by flat-fee discount brokerage Clever Real Estate.
Between May 31 and June 2, Clever surveyed 1,000 homeowners who bought their home between January and May 2020 on questions regarding their current finances, mortgage and how they felt about being a homeowner.
Clever found that homebuyers from 2020 are about half as likely to feel proud or comfortable buying a home compared to homebuyers of recent years.
Not surprisingly, the pandemic has also contributed to many homebuyers feeling concerned about their financial situation. Many employers have had to furlough or layoff workers as business slowed and social distancing protocols were put in place, while simultaneously, the markets have been on rocky footing.
More than 50 percent of homeowners surveyed said that at least one person who would typically contribute to housing costs had lost their job since buying their home.
Furthermore, 75 percent of 2020 homebuyers said they were concerned about paying their mortgage as a result of financial hardship in the wake of the pandemic.
Although about 55 percent of 2020 homebuyers said they’re continuing to make mortgage payments at a lower amount because of an agreement with their lender, about 18 percent said they’re behind on payments, without any sort of agreement in place with their lender.
Those buyers who purchased in 2020 both before and during the pandemic were more likely to feel homebuyer’s remorse compared to buyers of the previous five years. About 28 percent of buyers who purchased a home in January or February said they sometimes feel homebuyer’s remorse, while about 24 percent of buyers who purchased in March through May reported the same. Comparatively, only about 19 percent of buyers from 2015 through 2019 reported occasionally feeling homebuyer’s remorse.
Similarly, about 16 percent of buyers from January and February, and 18 percent of buyers from March through May reported often feeling buyer’s remorse, compared to only 7 percent of buyers from the previous five years who often felt remorse about their home purchase.
The majority of remorseful buyers had regrets because of how the pandemic might affect their home value, with about 36 percent feeling this way.
Clever’s study also showed that more than half of homebuyers are worried about their home going underwater as a result of the pandemic, with about 64 percent of buyers from January and February saying they were worried about going underwater, and about 53 percent of buyers from March through May expressing concern about going underwater.
Because mortgage qualification standards have become more stringent in the pandemic’s wake, fewer homebuyers from 2020 have been able to purchase a home with less than a 20 percent down payment compared to buyers from 2015 through 2019. Clever’s study showed that 2020 homebuyers were 32 percent less likely to put down less than 20 percent compared to buyers from the previous five years.
The survey results also revealed that motivations for buyers from the past five years differ slightly from the homebuyers of 2020. Most homebuyers from 2015 through 2019 were largely motivated because of the financial rewards of buying a home versus renting, while many 2020 buyers also noted the need for more space and the desire to live in a better neighborhood as primary factors for buying a home.
Overall, according to Clever’s data, the top must-have features for buyers in 2020 so far haven’t been so different from what’s become expected in recent years, including a garage, a large kitchen, an open floor plan and space enough for a growing family to expand into.