The just-released 2024 Bank of America Homebuyer Insights Report reveals some interesting demographically-based trends.
Younger Americans are worried “about the long-term consequences of renting” and how it will affect their financial futures. Specifically, 70% say they’re not investing in their financial future by renting, and 72% are worried that rent hikes could negatively impact their financial stability.
But most plan to take action to secure their futures—81% say that while renting suits their current life stage, it’s a temporary situation, and 76% plan to buy a home within the next five years.
One of the issues, says Matt Vernon, head of Consumer Lending at Bank of America, is that “Given the highly competitive homebuying market, renters are unsure whether now is the right time to buy. But, he adds, they believe buying a home…is the best decision for them in the long run.”
Buying a house is not just a financial decision for them either. Prospective homebuyers say there’s an emotional component to homeownership:
- 89% say owning a home brings emotional fulfillment
- 67% would rather own a home than rent for the “sense of permanence and emotional stability” homeownership provides
- 58% want to own a home because it’s the best way to “have control over their own living space”
In good news for realtors and real estate agents, prospective homebuyers are hesitant to get started because they are worried they’ll make a mistake when buying a house. They want to understand homebuyer grant programs (53%), how to finance or secure a mortgage (41%), interest rates (41%), and home-buying terminology (39%).
Baby Boomers are “Happy” Renters
Baby boomers have a different perspective. Currently, 80% of boomers say it’s better to rent than buy a home in today’s environment, up from 63% in last year’s report. Most boomer respondents prefer renting because they don’t have to worry about property maintenance and repair work (90%), they’re happy to “avoid the financial responsibilities and stresses associated with homeownership” (87%), and they want to be able to move whenever and wherever they want (83%).
Bank of America’s quarterly “On the Move” reports track how people move across major metropolitan statistical areas (MSAs). The latest release from the first quarter of 2024 shows that many Northeastern and Western MSAs are losing population, while it’s a mixed bag in the South.
And the report shows that Gen Z and millennials are the generations “driving net population growth in the MSAs with expanding population. However, much of the population loss in shrinking MSAs is due to baby boomers moving out.
What’s Next?
The “On the Move” report says a key consideration for the future is if the current moving patterns, with “populations falling in the Northeast and West while rising in the South,” hold.
If it does, the report suggests “key cities in the South will likely need to find ways to house these growing populations”—good news for home developers and construction companies. The data shows that most of the people on the move are younger and plan to buy a house in the next five years, creating new business opportunities for those in the real estate, homebuilding, remodeling, and home décor industries. Remember, when people buy houses, they also spend money fixing and furnishing them.
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbusinesscurrents.com, follow her on Twitter @Rieva, and visit her website SmallBusinessCurrents.com to get the scoop on business trends and sign up for Rieva’s free Currents newsletter.
