Millennial Buyers Often Settled During Pandemic Home Search

The introduction of record low mortgage rates and the opportunity to save due to stay-at-home orders propelled Millennial buyers into the market, but many did not expect all the hurdles. A new survey by home improvement referral site Angi found Millennials who purchased homes since March 2020 faced more difficulties finding and closing on a home than they anticipated, says Realtor.com. Nearly half of those surveyed searched for a home for six months or more and an even greater share visited more than 20 homes during the search. But once Millennials found a home they liked, they entered a bidding war to secure it. Two-thirds of Millennials said they placed at least four offers before securing the winning bid, and many admit to settling.

One-third paid over asking price, and 35% went over budget with their offer.

“Nearly every home sold during the pandemic went into a multiple-offer situation due to low supply and incredibly high demand, thus resulting in a majority of buyers having to pay over asking on homes,” says Ivan Estrada, a broker associate and CPA, Ivan Estrada Properties, with Douglas Elliman Real Estate. “Especially for first-time home buyers and millennials, their typical price point of under $2 million caused them to face a lot of competition.”

Buying homes requiring renovations
Most buyers start their home search knowing whether they want to buy a move-in ready property or a fixer-upper into which they’d put in some work. But some millennials in search of turnkey homes during the pandemic had to settle for places that needed more TLC than they had initially wanted to take on.

“The low inventory levels and tight housing market drove them toward homes that need work,” says Oisin Hanrahan, CEO of Angi.

According to the survey, 56% of millennials bought a home requiring minor or major renovations, although only 42.4% began their search with that intention.

Read More