It’s been a hard stretch as of late in the housing market, with inventory shortages and record-breaking highs in mortgage rates and home prices. Yet, in spite of navigating a tough market and making significant compromises, 4 in 5 who bought in the past two years didn’t regret their purchase according to a new report from LendingTree.
LendingTree’s new report surveyed more than 1,000 homeowners—both newer and older—to examine concessions made during the buying process. The report found that beyond the 80% who didn’t regret buying, baby boomers (ages 57 to 76) were least likely to have regrets at 90%, as opposed to 81% of millennials (26 to 41) and 80% of Gen X-ers (42 to 56) and Gen Z-ers (18 to 25).
Additionally, some of the highest satisfaction rates are among homeowners whose children are all 18 or older (89%) and those who’ve never been married (87%).
Key highlights:
- Recent homebuyers were more likely to make concessions than those who purchased in the past. An overwhelming majority—94%—made at least one concession, while only 82% of homeowners who bought more than five years ago reported making concessions.
- 27% of homeowners who purchased in the past two years say they paid above the listing price, versus 5% who bought more than five years ago. Meanwhile, 42% of homeowners who purchased in the past two years say they paid the listing price, versus 38% who bought more than five years ago.
- Bidding wars were also more prevalent in recent home sales. Buyers who purchased in the past two years got into a bidding war at more than double the rate of homeowners who bought more than five years ago—8% versus 3%.
- By homeowner age, baby boomers are the least likely to make concessions, with 23% reporting they made none. Gen Zers are the most likely, with 95% making at least one concession. Gen Zers and millennials are also the most likely to pay above the listing price, with 18% and 17% reporting they did, respectively. Baby boomers are the least likely to pay above asking, at only 4%.
- Younger buyers are more likely to run into appraisal issues: 19% of Gen Zers and 17% of millennials report financing issues because of the appraisal. Consequently, they were also more likely to include an appraisal gap clause, with 8% of Gen Zers and 4% of millennials saying they had one in their offer.
- Baby boomers are least likely to encounter appraisal issues, with only 3% saying they had a problem. Naturally, they are also least likely to include an appraisal gap clause, with only 1% reporting they included one in their offer.
- 27% of recent buyers made an offer without seeing the inside of the home in person. This rate is significantly higher than the 7% who bought sight unseen more than five years ago. Younger homeowners are more likely to have taken this path—24% of Gen Zers and 23% of millennials bought their homes without seeing the inside, while only 11% of Gen Xers and 4% of baby boomers say they did the same.
- Skipping the inspection was another concession many buyers were willing to take—especially recent buyers, with 24% saying they opted out. This is double the rate of homeowners who bought more than five years ago (12%). Older homebuyers are less likely to forgo the inspection—only 7% of baby boomers and 14% of Gen X buyers waived their inspection, while 21% of millennials and 23% of Gen Zers opted out.
Major takeaway:
“The high satisfaction rate amid the hot market makes sense,” said Jacob Channel, LendingTree’s senior economist. “Given the market climate, prospective homeowners were willing to do what it took to buy a home. And with low-interest rates in 2020 and 2021, buyers could make financial compromises to guarantee their purchase.”
Channel added, “Most homebuyers will look for a combination of affordability, comfort and quality in the home they buy. Younger buyers, like Gen Zers, who usually don’t have as much money at their disposal, will often focus more on the affordability of a home because they don’t have as much wiggle room in their budgets.”
“By skipping out on an inspection, homebuyers can potentially miss negative aspects of a house that can end up costing them a lot of money in the future, or, in a worst-case scenario, render their home unlivable. For example, an inspector could spot something that a buyer could miss, like faulty wiring that could lead to a fire. Though it may be tempting to save time or increase your chances of winning a bid, skipping out on an inspection is usually a bad idea,” concluded Channel.
For the full report, click here.
