2022 Housing Market Consumer Research Survey

Introduction

Homebound recently undertook a nationwide survey to better understand the thoughts and desires of those currently engaged in or considering entering the housing market. Our research approach tapped 700 consumers who fit our national criteria of those between 24-74 years old, looking to buy or build a home in the next 12 months, and planning to spend $300,000 - $3,000,000.  The results of this survey showed many areas of commonality across the country, coupled with distinct outliers in a few highly-competitive housing markets.  

Our reasons for undertaking this survey are many.  First of all, understanding our potential customers is paramount to the work we do.  Secondly, we want to offer what people in the market are looking for. Thirdly, we are in unprecedented times for both the housing market and the global supply chain; we want to understand how these things affect people’s long term decisions, especially when it comes to purchasing a primary residence.

If you aren’t aware, for the last two years, nearly coinciding with the pandemic, the housing market has boomed, with prices soaring, supply shrinking, and builders unable to keep up with project demand, as more people are sequestered at home and seek to improve their spaces.  Coupled with supply chain issues, labor shortages, material, shipping, and gas prices rising, it is a difficult time for finding a permanent (or at least longer-term) place to live if you want to own real estate instead of rent.

The two most common paths that people take when considering home ownership are either a) Buy an existing structure—whether it’s a condo, townhouse, tiny home, or single family home—or b) Build something new.  And that is precisely how our survey respondents self-selected their segments: into those two main ‘builder’ or ‘buyer’ segments. We also identified a third “dreamer” segment that love to browse and engage with real estate listings, but aren’t ready to make a move just yet. 

Findings

Satisfaction and reasons for moving

Right off the bat in our study, we received results that were surprising to us; the majority of home buyers and builders (74% and 83%) were satisfied with the buying or building process so far.  This is not what we expected, especially given the consistent news stories of bidding wars, low housing supply, and the percentage of sales happening at well over asking price.

We are willing to admit our assumptions are wrong, but this one feels right.  So we looked at the factors that may have contributed to this statistic.  Perhaps our qualification for being ‘in the market’ for a home was too loose. Had respondents been looking idly for a month, or systematically going to showings with a realtor for weeks on end?  How had we defined ‘the process’ of buying a home?  

One data point that validated our assumptions was the satisfaction rating from the Austin, TX market, sitting 20 points lower at 59% satisfied than the national average of 79% satisfied.

‍Austin, TX is one of the tightest housing markets in the country currently, with a large influx of people moving into the city and taxing the local infrastructure.  Large tech headquarters are setting up shop in Austin, exacerbating the housing crunch.

A data point that didn’t surprise us is that the biggest reason for moving is wanting more space. 40% of builders cited this as their top priority, while 33% of buyers agreed.  It’s a tale as old as time, you grow older, acquire more stuff (or family members), then desire more space to spread out.  Compared to other reasons submitted—such as a change in financial status, job change, or moving closer to family—it wasn’t even close.

Location

Regarding where our respondents intended to move, most buyers, 54%, and 44% of builders intend to stay in the same city, but move neighborhoods. Interestingly, 27% of builders intend to build in the same neighborhood they currently live in. In both instances, what can be inferred is that the larger city location is desirable, but the current housing stock is not what these movers are looking for.

Diving deeper into location, when we analyzed for urban or suburban preference, buyers were evenly split across both, but builders preferred urban settings at 54% to 31% for suburban areas.  We also found that builders had stronger opinions on where they want their homes to be located, in terms of established, master-planned, or smaller, newer communities of homes.  This makes sense, as builders will have to make many more decisions than buyers, who are often more malleable to change depending on what homes in their price range come on the market.

Finances

Next we looked at the financial differences between buyer and builders. 

We found that builders tend to have bigger, more expensive homes than buyers, but surprisingly - and importantly, for those on the fence between these two options - the general price per square foot that was paid between buyers and builders is almost the same, the buyers average spend at $277 per sq ft (spending $1M and averaging 3,610 sq ft) versus builders average spend at $280 per sq ft (spending $1.14M and averaging 4,075 sq ft). This is an interesting finding, highlighting an opportunity of relative value for buyers who might be intimidated by the cost of building a new home.

Whether you’re building or buying, there’s no denying that the average cost of housing is going up across the country.  When it comes to financing a new home, a mortgage was the most popular financing tool used by both builders and buyers.  The builder persona did use a larger range of financing options, being twice as likely to use a construction loan, or edging out buyers on both cash payments or builder financing.

We’d like to point out here that when building with Homebound, you don’t need a construction loan - our homes are fully available for traditional mortgage financing.  That’s one less headache and a few less terms you have to know.

Values and Priorities

After learning about location and financing choices, we narrowed in on finding out what attributes builders and buyers were looking for in their new homes.  They were unanimous on the first two counts, both citing Quality and Personalization as numbers 1 and 2, respectively. Where they differed were in areas of Thoughtful Design and Efficiency - builders prioritizing Architecture and Design, while buyers were more focused on minimizing operating costs and maintenance.  Another area that stood out as important to our builder persona was Eco-Friendly materials used in their home’s construction to minimize the environmental impact created and produce a safer environment for themselves.

When it comes to the more tangible aspects of a new home, builders and buyers are in lockstep when asked to rank the importance of the following attributes: 

1. Size
2. Layout
3. Interior Look
4. Price

We can’t blame them - this is the way we would organize our list, as well. Because we had such an outlier response to previous questions from Austin, TX, we took a look at their rank of home attributes and noticed that here, too, they deviated from the rest of the nation.  Builders and Buyers in Austin, TX ranked the importance of attributed as:

1. Price
2. Layout
3. Size
4. Preferred Neighborhood/Community

This is a departure, but not an unexpected one, as being able to afford a single family home in the Austin market is the first qualification to enter it.  In Austin, price will more heavily affect the size and layout of the home than in other areas nationwide.  Here we also see a marked interest in the neighborhood location.  With Austin expanding at its current rate and city infrastructure racing to keep up, the neighborhood location could mean the difference between being able to use public transportation, long trips to the supermarket, or other inconveniences.

Features

Continuing the survey, we asked buyers and builders what features they wanted in their new homes, both groups cited an average of 6-7 features that were highly sought after, agreeing that extra storage space and an expanded kitchen were important to both groups. Other features important to buyers were space to work from home, a deck or patio, and a walk-in pantry.  Builders, however, place greater emphasis on a home with a playroom and an apartment or in-law unit for relatives.  These differences in feature priority show perhaps a difference in homeownership - builders might already own a single family home including the features that new buyers are looking for - which they might not have currently - whereas when they’re designing their dream home, builders are looking for long-term, family-oriented solutions to make home life comfortable.

Despite these different feature preferences, builders and buyers agree across the board on the top three overarching features they desire in their homes: an open floor plan, space to work from home, and natural light.  Both groups also feel strongly about certain interior elements that need to be personalized, for example: the style, color, and layout of the kitchen, paint colors in all rooms, and the primary bathroom style and color.  Essentially, all home-seekers are most interested in personalizing the intimate spaces of their homes; the places they spend the most time.

When it came to personalizing exterior elements, builders by far had stronger feelings on the exterior style, front and backyard layout, and materials used.  This is no surprise to us, as these are major decisions to make when building a home, but less of a concern when buying. Buyers are weighing many features all at once when a home comes onto the market that they’re interested in, and exterior personalization is often an afterthought, or not considered when up against details like the right amount of bedrooms, an up-to-date kitchen, and inviting floor plan.

Construction or Planning

Construction and timeline planning are the least ‘fun’ areas of designing your dream or moving into your new home - for most, at least.  In this section of the survey, we wanted to understand how open all survey respondents were to buying a home in the construction phase, or a newly completed construction home.  Somewhat surprisingly, both builders and buyers were ‘extremely open’ to buying a home at this stage, buyers slightly more so, at 93% open to it, and builder 84% open to it.  To us, it makes sense that those in the ‘builder’ category would want to play a more active role in the construction of their home, but once informed that many of the personalization options are still available to select at this stage, builders were on board with buying a home at this stage.  

When it comes down to it, this survey highlighted what we already know in one regard -

those who are motivated to build their own home do so because they want a home that is unique.

In fact, it was the main reason selected by our builder audience at 56% of responses. The next most popular reason was because they think the building process will be fun, which it certainly can be!

Conclusion

The results of our nationwide survey were enlightening and helpful to understand the decisions and preferences both buyers and builders are weighing when selecting a new home.  And in many areas, both groups share the same priorities and preferences. Everyone agrees that an open floor plan, space to work from home, and natural light are important pillars of their home. We also learned that across the board, people’s top priorities are size, layout, interior look, and then price, when it comes to how to decide on a home.

We found that the main differences between builders and buyers centered around builders having stronger preferences for the type of community they were building in, the types of materials used in the the construction and for the exterior of their homes, and some house features like electrical, granny suites, and playrooms, that suggest a stronger desire about the longevity of the comfort of their homes.  We might infer that builders intend to stay in their newly-built homes longer term than those who are buying - some perhaps for the first time.

From our perspective, that of a new construction home builder of personalized homes, we learned that most people don’t want to leave their current neighborhood or city - they’re just looking for a housing option that might not currently exist there, at the price point they want - and that’s certainly something we at Homebound can help address.

We were also happy to see that our survey respondents prize uniqueness and personalization in their homes, citing the kitchen style and color, primary bath style and color, floor plan, and paint colors as areas they are most interested in personalizing.  These are areas included in, but not limited to, what’s included in Homebound’s interior design packages.  

Overall, this study provided valuable insight into the minds and hearts of those currently in the housing market. We look forward to continuing to learn from and provide options to this dynamic segment of the population now and in the future. We hope you were able to take away some insights, as well. If you’d like to see the specific results of our survey, you can download the report here. For more news, insights, and advice, head to The Homebound Journal to discover more of our latest content.