Home buyers don’t move out of necessity anymore

We spend a lot of time at The Basis Point staring at housing data, figuring out what it means for us normal people, and how it can help us make decisions.

Buying and selling a home is a local process, so not all national housing data is super useful to you.

But this National Association of Home Builders chart is an exception because it explains why home buyers move, which is useful for dealmaking.

We’re conditioned to think people mostly move out of necessity—for a job or to shorten their commute—but the chart shows a lot of people move for a better life.

This means most homebuyers are in good enough financial situations to make decisions out of desire and not necessity.

It also implies buyers could have the upper hand negotiating with sellers. But for years, low inventory in most markets across the country has led to buyer bidding wars.

Translation: it’s been a seller’s market.

Now the tide is turning to a buyer’s market as way fewer homes sell over asking price and bidding wars have nearly vanished.

So buyers moving to meet lifestyle objectives in this chart are not only in control of their fate, but now they also more control over home buying negotiations.

And since 61% of sellers are also buying a new home, if they know they’ll get a good deal on the buy side, they might be willing to make concessions on the sell side.

But remember from above that all negotiating and dealmaking is local. This is just a dealmaking point to consider.
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Reference:

– Reasons Why Home Buyers Move (NAHB)