Whether in search of outdoor space or a home office, the coronavirus pandemic forced the hand of many first-time homebuyers.
In a new survey, home service provider Angi found that 70% of millennials who purchased a home during the COVID-19 outbreak said that the health crisis influenced their decision to do so, while 27% named it the primary factor in their decision-making.
However, almost half (49%) of respondents noted that the housing market was more competitive than expected. As a result, many made concessions on their dream home to secure their purchase.
Market conditions result in few options, many renovations for homebuyers
The Angi survey discovered that due to the lack of availability in the housing market, millennials still faced a variety of challenges before and after their big purchase, including:
- Spending six months or longer on the home search (42%)
- Visiting more than 20 homes (57%)
- Putting in at least four offers before winning the bid (66%)
- Paying over asking price (33%)
- Going over budget with their offer (35%)
Another 56% of respondents bought a home that needed renovations — even though only 42% originally set out to do so. Perhaps these buyers have decided to play the long game, as 21% said they will keep their home for another 10 to 20 years; another 33% plan to own their home forever or until retirement.
These changes don't come without cost, though. The majority of respondents (69%) said they plan to spend more than $25,000 on renovations, with just under one-fourth (22%) having renovation budgets of more than $100,000. Certain renovations, however, do offer the potential for future savings, including on home insurance costs.
However, 46% of respondents have already gone over their renovation budget within the first year of owning their home. This may speak to the extensive renovations needed to update their home, as 28% reported buying a home that needed major renovations.
Other challenges may also have contributed to this financial predicament, as millennial homeowners reported other obstacles in the renovation process. Specifically, these included:
- COVID-19 safety cost increases (37%)
- Material or product shortages (37%)
- Scheduling challenges (36%)
- Higher-than-anticipated costs (35%)
- Labor shortages (31%)
- Difficulty communicating with professionals (29%)
Millennials prioritize family needs and location in their home purchases
Many millennials put the needs of their family over their job during the homebuying process. In fact, when asked about the biggest reason for starting their home search, many respondents gave the following responses:
- Family considerations (19%)
- The birth of a child (14%)
- Marriage or engagement (12%)
Location was another priority for many, as the Angi survey revealed that 51% of buyers purchased a property in a different county or state. Of the respondents that bought a home in a different area, 33% prioritized location over job security — after all, many workers already have plans to quit their jobs if they can’t continue working remotely. Angi also found that 53% of buyers changed jobs along with their address. Those that kept their positions said:
- They're able to work their same job remotely (30%)
- They hope their employer will let them work remotely when the pandemic ends (17%)
Methodology: The Angi survey was conducted with Pollfish and compiled by DKC Analytics. The respondents, who were surveyed between April 16-19, 2021, were made up of 1,000 U.S. millennial-age adults (those between 25-39 years old) nationwide who bought a home since the start of the pandemic.