Prospective homebuyers are resorting to creative approaches in shopping for a home to stand apart in a market seeing increased competition, according to Berkshire Hathaway HomeServices’ latest Homeowner Sentiment Survey.
The survey found that 58% of millennial respondents would offer more of an earnest deposit to show their commitment to sellers. Other ways millennial respondents would compete in the market include sending personal letters to sellers (36%) and making offers above asking price to secure the home (31%). Also, 45% of prospective homebuyers are willing to cover closing costs to remain competitive, according to the survey.
Although the market is seeing tight competition, consumers continue to view the market enthusiastically given lower mortgage rates and potential increases in home values. Seventy-one percent of homeowner respondents expressed a positive sentiment toward the real estate market, with 51% saying low mortgage rates drove their favorable feeling and 44% citing price appreciation.
“Historically low mortgage rates continue making homeownership achievable for many Americans,” Berkshire Hathaway HomeServices President and CEO Gino Blefari said. “We believe mortgage rates will remain within a range of current low levels for the foreseeable future.”
However, competitiveness concerns remain. In the survey, 72% of prospective homebuyers acknowledged that purchasing a home has become more competitive given the shortage of listings across many US markets. A majority of millennial buyers at 76% were concerned about overpaying for a home, while a similar percentage found it challenging to find a competitively priced home.
Contributing to the listings slump are Baby Boomers, 73% of whom said they are hesitant to list their homes given rising home values. Four out of five in the demographic also said they prefer not to shop for a new property at the moment.