COVID-19 dramatically shifted the way people bought and sold homes over the last year, according to a survey report from ServiceLink, part of the Fidelity National Financial family of companies.
The 2021 ServiceLink State of Homebuying Report includes input from 1,000 homeowners surveyed in April on how high home prices and low inventory impacted their decision to move, if they took advantage of historic low interest rates and how the pandemic influenced their experience with technology.
“The COVID-19 pandemic and market conditions forced the real estate industry to reassess how it serves today’s homebuyer. With the evolution of technology to help streamline the process, it’s not surprising that our data found consumers are turning to tech-enabled providers who can meet their needs through any phase of the process,” ServiceLink President of Origination Services Dave Steinmetz said in a release.
Many respondents considered buying a home during the pandemic, but ultimately, only 11 percent reported buying a home in the last 12 months, according to the report. Of those that did buy a home, 36 percent said they did so to upsize, 32 percent bought it as an investment and 23 percent needed more space to work remotely.
Of the 33 percent of respondents who decided against buying a home in the past year, 34 percent decided to upgrade their current home instead, 31 percent said housing options were too expensive, and 24 percent said their financial situation changed. Nearly one-third of respondents (32 percent) said they are likely to purchase a new home in 2021.
Slightly more respondents financed their homes with cash/savings (43 percent) than with a traditional bank lender (42 percent). According to the report, 28 percent received money from family and friends, either being gifted/inheriting funds (14 percent) or borrowing (14 percent) from those closest to them, and 11 percent borrowed from their 401ks to finance their home. Nearly 1 in 5 (17 percent) of Gen Z/millennials reported borrowing from their 401k.
The youngest generation of homebuyers led the surge in refinances last year, according to the report: the 30 percent of respondents who refinanced last year were primarily driven by Gen Z/millennial respondents (45 percent), compared with Gen X (30 percent) and baby boomers (6 percent.) Half of the respondents said they are unlikely to refinance in 2021.
Of those respondents leveraging technology in their homebuying process, most used it primarily to research property listings online (74 percent) or take a virtual tour of properties (47 percent). And 18 percent said that moving forward, they would consider buying a home without seeing it in person.