Feb 02

Growing Buying Segment May Offer You a New Niche

Growing Buying Segment May Offer You a New Niche

Veterans are bullish when it comes to homeownership. A recent survey by Fannie Mae showed a slight decline in overall homebuying confidence among the American population, but among veterans, that confidence is growing.

Indeed, 58% of veterans say they plan to buy a home within the next five years, according to The 2021 Veteran Homebuyer Report, produced by Veterans United Home Loans based on a survey of about 1,000 vets. That could amount to 11.3 million potential veteran buyers, the report notes.

“Veterans have a deep desire to own a piece of the American dream they vowed to defend,” says Chris Birk, vice president of mortgage insight at Veterans United, a lending company that works with veterans.

Despite a rise in home prices, vets feel financially ready to buy. Sixty percent of veterans surveyed believe their financial situation will improve during the year. Fifty-nine percent believe they will be able to get the home of their dreams.

 

Chart shows veterans' interest in housing

Fannie Mae

 

Many veterans overestimate the down payment and credit score they need to qualify for a mortgage. Nearly 90% of veterans believe they need at least a 670 FICO score to qualify for a home loan. Also, 41% believe they need to put down more than 20% of a home’s purchase price. Many veterans are eligible for a VA home loan, which requires no down payment. The report found, however, that only 3% of vets said they believed they’d be able to get a mortgage with no down payment.

VA Loans Are Having a Record Year

Like the general population, the pandemic has affected homebuying plans for vets, the survey finds. Nearly half of veterans cited the COVID-19 pandemic as a source of uncertainty and a potential barrier to buying a home this year. But 43% of those surveyed said they bought a home sooner than they had planned due to the pandemic; 32% placed their homebuying plans on pause; and 21% decided to refinance on their current home.

The top 10 reasons vets want to purchase a home are:

  • Change of scenery/lifestyle: 25%
  • Need smaller home/trading down: 20%
  • Need bigger home/trading up: 19%
  • Want to be closer to family: 19%
  • Family size change with child: 17%
  • Income change/right time: 17%
  • Tired of wasting money on rent: 16%
  • Build more equity for retirement: 15%
  • Retiring or cutting back on work: 15%
  • Neighborhood no longer desirable: 14%
Source:
“2021 Veteran Homebuyer Report,” Veterans United Home Loans (Jan. 13, 2021)
©National Association of REALTORS®
Reprinted with permission

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