Could the Housing Market Be Turning Around For Buyers? Some Prospective Homebuyers Think So

April 23, 2024

COLUMBIA, Mo., April 23, 2024 - As the spring homebuying market heads into full swing and more sellers begin to enter the market, Veterans and service members are moving up their homebuying timelines, according to the Veteran Homebuying Report, a quarterly national survey of prospective homebuyers, released today by Veterans United Home Loans, the nation's largest provider of VA loans. Though concerns about finding a home and high home prices persist, respondents were more optimistic about the economy and their own financial outlook.

The online survey of more than 600 Veterans and service members conducted between March 1-15 found 42% of buyers plan to purchase in the next six months, up 15 percentage points from a year ago. Among would-be buyers overall, 71% plan to buy in the next 12 months, up slightly from last quarter.

According to the survey, nearly a third (31%) of buyers are willing to increase their budget to get the home they desire, compared to 24% last quarter. Sellers continue to be optimistic about getting the sale price they are after and whether now is a good time to sell at 69% and 77%, respectively. At the same time, an increasing number of sellers (31%) expressed concern about getting top dollar for their home because of high interest rates, up from 25% three months ago.

"Buyers are starting to come to terms with the current environment. Rather than waiting for interest rates to drop, they are more focused on being able to get the house that they want and whether they can make the monthly payment work," said Chris Birk, vice president of mortgage insight at Veterans United. "Sellers, a majority of whom will also be buyers, are optimistic about getting the price they want, but realize their money won't go far when purchasing their next home."

Homebuyers are more optimistic about the economy, interest rates
The survey's economic outlook score jumped 14 points quarter over year, with more respondents expecting interest rates, inflation and the overall economy to improve.

Average interest rates have fluctuated during the first quarter, but buyers expect to see rate cuts this year. More than 4-in-10 respondents believe the economy will be better over the next year, up from 34% in the fourth quarter. For the first time, fewer than half of Veterans (47%) feel inflation will continue to rise over the next year, which suggests more would-be buyers believe the economy's health is improving.

About 64% of buyers expect to be better off financially in the next 12 months, up from 56% in the third quarter. In all, 55% feel capable of getting a new mortgage right now, which is an increase from 49% in the fourth quarter.

More inventory will get more Veterans moving
When asked what would lead to purchasing sooner, "More inventory in the area I'm looking" saw the biggest gain among respondents, with 34% indicating that more homes to choose from would get them moving, up 7 points from last quarter.

Lower interest rates continued to rank as the top reason for purchasing sooner, with 57% of respondents saying it was their top trigger, a three-point gain from last quarter.

Top 5 Triggers To Buying Sooner

These top concerns could be why respondents don't necessarily feel as though they are calling the shots in the current market. Four-in-ten surveyed said they feel in control of their homebuying plans (40%). In contrast, 42% said the volatility of the market is dictating their next steps when it comes to buying a home.

Sellers are a mixed bag

Slightly over 7-in-10 current homeowners indicated that they intend to sell, up from 61% last quarter. In addition, nearly a quarter of respondents felt that "Right now may not be the best time to sell," far less than last year, when a third (33%) of homeowners didn't feel the current market was favorable to sellers. These responses could signal that more sellers might be coming off the sidelines in the coming months, which would free up inventory for buyers.

At the same time, prospective sellers are less concerned about getting the sale price they want, but have mixed feelings about becoming a homebuyer again in today's market because of low inventory, high home prices and elevated mortgage rates.

Worries about selling

Additional findings:

• About a quarter of Veterans (24%) feel stressed about their financial situation, down from 27% in Q4.
• Homebuying plans are split among buyers: 39% prefer to buy now and refinance later, while an equal percentage prefer to wait until the market is more favorable to buy.
• When it comes to deciding where to live, crime (71%), cost-of-living (68%) and access to fresh food and groceries (60%) are the top considerations for Veterans.

To view the full report, including charts and a detailed methodology, please visit
https://www.veteransunited.com/education/veteran-homebuyer-report/

About Veterans United Home Loans

Based in Columbia, Missouri, the full-service national direct lender financed more than $17 billion in loans in Fiscal Year 2023 and is the country's largest VA lender, according to the Department of Veterans Affairs Lender Statistics. The company's mission is to help Veterans and service members take advantage of the home loan benefits earned by their service.

VeteransUnited.com | 1-800-884-5560 | 550 Veterans United Drive, Columbia, MO 65201 | Veterans United Home Loans NMLS # 1907 (www.nmlsconsumeraccess.org). A VA approved lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. Licensed in all 50 states. For State Licensing information, please visit http://www.veteransunited.com/licenses/. Equal Opportunity Lender.