Getty Images
Homebuyers who took advantage of low mortgage rates during the COVID-19 pandemic have revealed their one regret: moving too fast to buy a home in a competitive market.
As people were forced to work from home, it opened up opportunities for them to move closer to family, relocate to areas with more space or better affordability, or simply for the ability to explore.
The metros that saw the most homes sold between 2020 and 2023 were New York City (620,000 sales), Dallas (540,000 sales), Chicago (490,000 sales), Atlanta (470,000 sales), and Houston (460,000 sales), according to Realtor.com® data.
During the pandemic, 16.8 million existing homes sold with a median sale price of $309,000.
“The pandemic offered first-time buyers and repeat buyers the opportunity to lock in a low mortgage rate on a new home, and many took advantage,” explains Hannah Jones, senior economic research analyst at Realtor.com.
“However, the massive influx of buyers led to a highly competitive market, which forced home shoppers to make decisions much faster than many would have liked.”
The attitude has shifted, and at least 91% of people surveyed for an Opendoor report say pandemic-era mistakes have since influenced them to consider selling their homes.
The Opendoor survey was done by Wakefield Research, among 1,000 nationally representative U.S. first-time home sellers who sold their first home in the past 12 months or who currently have their first home on the market between Feb. 21 and March 6.
The report looks at first-time home sellers throughout the generations. It found “control and convenience” play a role when it comes to making their next big purchase. And the thought of a “forever home” is now seen as a “for now” investment.
(Getty Images)
The idea of a “forever home” feels unrealistic for those surveyed. At least 68% of home sellers no longer see that as attainable, and 81% are selling what they once thought would be their lifelong home.
It’s not to say that people aren’t staying in their homes, because they are—and longer—about 2.3 years more than those who sold in the past decade. The reasons for staying are because of high home prices and limited inventory. It’s not looked at as permanent, though. Instead, the report found buyers are interested in finding a home that fits their evolving needs over time.
This is similarly reflected across the generations. Gen Z (38%) and millennials (39%) look at their next home as a smart investment and would like to stay as long as it’s financially feasible. Meanwhile, Gen X (44%) and baby boomers (40%) are still holding out for their “forever home.”
For now will do
When it comes to owning a first home, 27% of Gen Z view homeownership as a stepping stone. The opinions dwindle from there, with only 15% of Gen X and 9% of baby boomers agreeing it’s a stepping stone.
The younger generations are the ones who are likely to second-guess their purchases. They’re realizing what they want and need has changed. 94% of Gen Z and 86% of millennials admit to pandemic-era buying mistakes, compared to only 48% of baby boomers.
“The intensity of the pandemic-era market may have led buyers to purchase a home that was perfect for that time in life, but may not be right forever,” says Jones. “Remote work has ended or been scaled way back at many companies, which may shift homeowner preferences toward a shorter commute versus more home office space.”
Meanwhile, Gen Z admits to its own mistakes with 35% saying they bought too soon, while another 40% said they moved without considering the long-term lifestyle.
Millennials admit finances are a big driver. At least 37% underestimated maintenance costs, and 31% overlooked inflation and interest rates.
Both groups selling—Gen Z (29%) and millennials (23%)—were also affected by the switch in remote work and more employees being asked to return to the office.
Generation gap year
The term gap year has been typically used for high school graduates taking a year off before entering college, but now home sellers are taking time before committing to their next place. Breaking it down further, 21% of baby boomers are seven times more uncertain about their next move, compared to 3% of Gen Z.
Renting before buying is an option for 20%, another 20% said they’re waiting for the right market conditions, and only 12% said they’ll consider moving in with family or friend.
The main theme is affordability. It’s a challenge across all the generations, and that’s why hitting the pause button on a big purchase is a realistic choice; but selling a home for financial reasons is also an option for 31% of Gen X and baby boomers
Convenience is a priority because of the stresses that accompany selling a home.
Sellers say they would prefer a more “streamlined” process over getting the highest price. Over 65% of those surveyed said they would accept 20% less for their home just to avoid the stress of repairs, staging, and the uncertainty of offers.
Baby boomers, the older generation, are the exception, with only 38% willing to make a trade-off. Gen Z (66%), millennials (74%), and Gen X (68%) surveyed said they’ll give up the money.
Opendoor put it in perspective, citing the average home price in the U.S is $419,200—that means sellers would forfeit $83,840 for fewer headaches.