Description

“Consumers are changing the way they approach home purchasing, leaning more on digital tools to streamline the search process and looking to intrapersonal and digital sources to find their mortgage lenders. A surge in independent decision-making in the home search process has led to an increase in consideration for new construction homes despite affordability challenges introduced by current mortgage rates. Home sellers and mortgage lenders looking to navigate through a market with weakening demand must illustrate how they can catalyze the process of a home purchase while minimizing the financial burden that such a commitment entails.”

– Patrick Rahlfs, Senior Research Analyst

This Report will look at the following areas:

  • Home types considered in the purchase process
  • Mortgage lender sources
  • Home purchase timing
  • Down payment planning
  • Home purchase motivations
  • Attitudes toward home purchasing and mortgages

Table of Contents

  1. Overview

    • What you need to know
      • This Report looks at the following areas
        • Definition
          • Market context
          • Executive Summary

              • Top takeaways
                • Consumer trends
                  • The new homebuyer is independent
                    • Figure 1: Involvement in home purchase process, by time of home purchase, 2022
                  • Young homebuyers are shifting toward personal and online sources for mortgages
                    • Figure 2: Source of mortgage lender, by generation, 2022
                  • Home purchasing goes digital, loses emotional heft
                    • Figure 3: Attitudes toward home purchasing, by year, 2021 and 2022
                  • Competitive strategies
                    • Home equity loans take marketing space vacated by mortgages
                      • Figure 4: Share of direct mail volume, mortgages vs home equity loans, 2021-22
                    • Rocket Mortgage addresses inflation
                      • Figure 5: Rocket Mortgage Inflation Buster TV ad, 2022
                    • Market predictions
                      • Figure 6: Home purchasing and mortgages category outlook, 2023-28
                    • Opportunities
                      • Lower-earning young consumers may look past market context
                        • Figure 7: Planned timing of next home purchase, by age and income, 2022
                      • Gen X may be quickest to react when rates drop
                        • Figure 8: Attitudes toward home purchasing, by generation, 2022
                    • Market Size

                      • Homeownership rate climbed in 2022, rebounding to a near decade high
                        • Figure 9: Homeownership rate, 2012 to Q4 2022
                      • Mortgage rates skyrocketed to 15-year highs
                        • Figure 10: Average 30-year mortgage rate, 2012-22
                      • Median house price surpassed $450,000 in 2022
                        • Figure 11: Annual median sales price of houses sold in the US, 2012-22
                      • Months’ supply of new houses reaches new high
                        • Figure 12: Monthly supply of new houses in the US, 2012-22
                    • Market Drivers

                      • Personal Savings Rate remains depressed
                        • Figure 13: Personal Savings Rate, 2016-22
                      • TV spend for mortgages surpasses direct mail spend
                        • Figure 14: Mortgage category cross-channel spend, 2021-22
                      • Home equity loans carve out a greater market share
                        • Figure 15: Share of direct mail spend, mortgages vs home equity loans, 2021-22
                      • Home ownership affordability plummets to 15-year lows
                        • Figure 16: National Home Ownership Affordability Monitor Index, 2019-22
                    • Competitive Strategies and Market Opportunities

                      • Rocket Mortgage spends big on Inflation Buster
                        • Figure 17: Rocket Mortgage Inflation Buster TV ad, 2022
                      • Chase promoted the convenience of its MyHome app in TV ads
                        • Figure 18: Chase MyHome App TV ad, 2022
                      • Citi offers flexible access to savings
                        • Figure 19: Citibank mortgage direct mail piece, 2022
                      • Wells Fargo highlights low down payment options
                        • Figure 20: Wells Fargo mortgage email, 2022
                    • The Home Purchasing and Mortgage Consumer – Fast Facts

                      • Home Purchasing Process

                        • About half of homebuyers make purchase decisions by themselves
                          • Figure 21: Involvement in home purchase process, 2022
                        • Two thirds of recent homebuyers made purchase decision alone
                          • Figure 22: Involvement in home purchase process, by time of home purchase, 2022
                        • Men are more likely to make home-buying decisions independently
                          • Figure 23: Involvement in home purchase process, by gender, 2022
                        • More than half of home buyers did so for the first time
                          • Figure 24: First-time homebuyers, 2022
                      • Home Types

                        • 58% of homebuyers considered new construction homes
                          • Figure 25: Types of homes considered, 2022
                        • Consideration of new construction homes is on the rise
                          • Figure 26: Types of homes considered, by year, 2021 and 2022
                        • Single-family homes remain most popular
                          • Figure 27: Potential homes to consider, 2021 and 2022
                        • Black and Hispanic homebuyers are more likely to consider multi-family homes
                          • Figure 28: Potential homes to consider, by race and Hispanic origin, 2021 and 2022
                      • Mortgage Lending

                        • Mortgage referrals are disparate
                          • Figure 29: Source of mortgage lender, 2022
                        • Young homebuyers turn to personal and online sources rather than brokers
                          • Figure 30: Source of mortgage lender, by generation, 2022
                      • Home Purchase Timing

                        • Just 8% of consumers plan to purchase a home in the next year
                          • Figure 31: Planned timing of next home purchase, 2022
                        • 35-44 year olds have the most demand for homes in the next two years
                          • Figure 32: Planned timing of next home purchase, by age, 2022
                        • Lower-earning young consumers have high demand for homes
                          • Figure 33: Planned timing of next home purchase, by age and income, 2022
                      • Down Payment Planning

                        • More than 60% of future homebuyers hope to put down less than 15%
                          • Figure 34: Planned down payment percentages, 2022
                        • 20%+ down payments are dominated by high-income consumers
                          • Figure 35: Planned down payment percentages, by income, 2022
                      • Length of Home Ownership

                        • About half of consumers have moved within the past five years
                          • Figure 36: Time since home purchase, 2022
                        • More than 60% of Gen Z has moved in the last two years
                          • Figure 37: Time since home purchase, by generation, 2022
                      • Home Purchase Motivations

                        • Increased space and new locations are the top drivers of home purchases
                          • Figure 38: Home purchase motivations, 2022
                        • Millennials seek space for themselves and families
                          • Figure 39: Spatial purchase motivations, by generation, 2022
                        • Recent homebuyers sought personal space, work-from-home capabilities
                          • Figure 40: Home purchase motivations, by time since purchase, 2022
                        • Baby Boomers are most likely to buy a home based on relocation
                          • Figure 41: Home purchase motivations, by generation, 2022
                      • Attitudes toward Home Purchasing and Mortgages

                        • One in three consumers did most of their home search online
                          • Figure 42: Attitudes toward online home purchasing, 2022
                        • 16% of consumers have been deterred from buying a home due to interest rates
                          • Figure 43: Attitudes toward mortgage rates, 2022
                        • Homes are becoming increasingly commodified
                          • Figure 44: Attitudes toward home purchasing, by year, 2021 and 2022
                        • Young consumers are less content with living situation, but waiting for personal life changes
                          • Figure 45: Attitudes toward home purchasing, by generation, 2022
                      • Appendix – Data Sources and Abbreviations

                        • Data sources
                          • Consumer survey data
                            • Marketing creative
                              • Abbreviations and terms
                                • Abbreviations

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