1 in 5 US homebuyers willing to sacrifice safety for affordability: Survey
An even higher number of Gen Z respondents said they would put affordability over safety
All homebuyers ‘forget’ that 6% of the home sale is going to the realtor: Mitch Roschelle
Madison Ventures+ managing director Mitch Roschelle joins ‘Varney & Co.’ to break down the 30-year-low report on existing housing data.
About one in every five prospective homeowners is willing to sacrifice physical safety to find an affordable home within the next year, according to a recent report from Redfin.
An even higher number of Gen Z respondents, 23.7%, said they would trade their safety for affordability compared to 18.1% of Millennials, 17.5% of Gen Xers and 5.5% of Baby Boomers, according to a Redfin-commissioned survey conducted by Qualtrics in February.
Survey respondents also said they would be willing to sacrifice less vital housing needs, like the number of bedrooms or bathrooms, for a more favorable home price.
"Younger generations have come of age during a housing supply crunch, where prices are at all-time highs," Redfin Senior Economist Elijah de la Campa said. "Couple that with them earning less—relative to older generations—and you can see why they are willing to make more serious sacrifices to find a home they can afford."
HOME PRICES JUST SET ANOTHER RECORD HIGH AS AFFORDABILITY CRISIS WORSENS
One out of every five prospective homebuyers in the U.S. say they would be willing to live in less safe neighborhoods in order to find a more affordable place to live. (Nathan Howard/Bloomberg via Getty Images / Getty Images)
"When the typical household earns less than is needed to buy or rent a typical home, house hunters can’t afford not to make sacrifices," he added.
But, some respondents, 16.4%, said their concern about safety and crime was at least one of the factors in their decision to move. Concerns about safety as reasons to move followed behind wanting more space, a lower overall cost of living and lower home prices.
Over 40% of house hunters also said they would be willing to trade off access to their doctor and healthcare amenities, while 26% said they would forgo proximity to restaurants, bars and coffee shops in order to afford a home.
Over a quarter of respondents said they would trade highly rated schools for an affordable house, while 34% said they would consider a longer commute and 27% said they would be willing to consider not having a space to work from home.
MORTGAGE DEMAND ROARS BACK TO LIFE AS RATES DROP TO LOWEST LEVEL IN A YEAR
A home available for sale is shown on May 22, 2024 in Austin, Texas. (Photo by Brandon Bell/Getty Images / Getty Images)
The U.S. economy is facing a housing affordability crisis that is making it difficult for younger generations to become homeowners amid high mortgage rates and expensive construction materials.
Home prices reached a new record in May amid an ongoing housing shortage. However, mortgage rates notably fell sharply this week to the lowest level in more than a year, igniting a boost in demand in the housing market.
"Mortgage rates plunged this week to their lowest level in over a year following the likely overreaction to a less than favorable employment report and financial market turbulence for an economy that remains on solid footing," said Sam Khater, Freddie Mac's chief economist, according to a FOX Business report.
"The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move," he added.
According to a report published last month, the typical starter home is worth at least $1 million in 237 cities, which is the most ever, according to findings published by Zillow.
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FOX Business' Megan Henney contributed to this report.