Massachusetts Home Buyer Guide

A recent survey of milleninals shows that age group has a strong interest in homeownership, and their interest in becoming first-time home buyers has increased in the past year, PulteGroup, Inc., a national homebuilder, reported April 1, 2013.   

For renters ages 18-34 with an income of more than $50,000, 65 percent indicated their intention to buy a home has significantly or somewhat increased in the past year.  The definition of millennials varies slightly depending on who you ask, but generally it makes up people born from about 1980 until about the year 2000.  

Additionally, the vast majority of millennials aren't moving into their first home on their own. Millennials plan to be coupled in their home, with 76 percent indicating they will live with a spouse or significant other.  Of the remaining 24 percent not moving in with a significant other, 22 percent anticipate having a roommate –including a friend, parent, in-law, grandparent or sibling – living with them.

In 2012, PulteGroup sold just over 19,000 homes of which approximately 30 percent were first-time homebuyers. In the company's internal buyer surveys, more than 50 percent of millennials reported that the desire to own/build equity was the primary reason for purchasing their new home. The second largest reason, at 12 percent, was that first-time home buyers were tired of apartment living. Rents in the Greater Boston Area and throughout Eastern Massachusetts have been rising for the past several years. 

The survey also showed that millennials want homes that make efficient use of every space.  In fact, one of the most important home feature to a millennial buyer today is the floor plan layout; thus, 69 percent of millennials want an open/layout space in the kitchen and family rooms for entertaining family and friends. Millennials also categorized the following aspects in a new home as extremely important/very important:

• 84 percent said ample storage for daily items

• 76 percent said space for TV, movie, sports watching

• 73 percent said the entry to the home

• 63 percent said outdoor living/deck

• 36 percent said the ability to conduct business from home

The Internet is the primary source of information for first-time home buyers today, with more than 90 percent researching via the Internet during their home search.  When seeking personal advice about purchasing a home, the survey revealed that the plugged-in millennial will not only log onto the Internet, but they will also reach out to both real estate professionals and their own parents.  Millennials really do their homework and use several resources to make important decisions regarding home buying.

Meanwhile in another survey, first-time home buyers represented the fastest growing segment of home buyers in January and February, according to the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. 

Current homeowners looking to move up posted the largest drop in market share in the month, dropping to the lowest market share recorded of current homeowners since June 2012. 

Current homeowners make up 42.5 percent of the market share, while first-time home buyers share climbed to 34.5 percent of home purchase transactions in February, based on a three-month moving average. First-time home buyers posted a second monthly increase in home purchases, after reaching a four-year survey low of 32.9 percent in December 2012. 

The survey showed that first-time home buyer traffic reached a four-year high in February. 

“First-time home buyers are the wildcard in the upcoming spring-summer home buying season,” says Thomas Popik, research director for Campbell Surveys. “We see strong first-time home buyer traffic, but it’s still not clear that the traffic will translate into increased purchases, because first-time home buyers are dependent on low-down-payment financing, such as FHA mortgages, and announced FHA program changes will take effect this spring.” Fortunately, Massachusetts first-time home buyers have better home loan options than FHA.

Current homeowners are expected to increase their home purchases this spring, with the survey measuring a big jump in home buyer traffic among this group of buyers too. 

Also, investors’ share of home purchases climbed to a four-month high in February, accounting for 34.5 percent of transactions. The rise in real estate investors is one reason for today's low inventory of homes for sale in Massachusetts.