Blog posted On July 09, 2019
The need to buy a home is often triggered by milestones like starting a family, children reaching school age, or career movement. It’s not surprising that almost half of all home buyers and one-third of renters who moved in the past year had children under 18 living at home. Zillow’s 2018 Consumer Housing Trends Report found that buyers with young children were more likely to go over budget than buyers without children. Having children significantly changes home buyer wish lists and, in some cases, makes it more difficult to compromise.
Among the top factors considered by home buyers with children are school districts and commute. Without children, some home buyers may be willing to put up with a long commute in favor of a farther, more affordable home. When children are in the picture, a longer commute means it takes longer to pick up the kids from daycare or school, get home, get dinner on the table, and put everyone to bed at a reasonable hour. At the same time, the need for walkability may decrease, when home buyers move to the suburbs for better rated or less crowded school districts.
From Zillow’s study, 45.9% of home buyer households and 33.1% of renters who moved in the past year included children under 18 living at home. Of that selection, 25.7% went over budget, in some cases, to buy in a better location or satisfy a longer list of needed amenities. Of the buyers who stayed within their budget, 66.5% had to make compromises to do so. Some of the common compromises were increasing the commute, sacrificing desired features, or buying smaller.
So, what are parents looking for that’s pushing them over budget their budgets? 83.7% of home buyers with children under 18 desired single-family, detached homes, which tend to cost more than townhouses or condos. Other top-rated home features included, specific number of bedrooms and bathrooms, preferred square footage, air conditioning, private outdoor space, potential to increase in value, off-street parking space or garage, and adequate storage. Home buyers with young families may also be less mobile than home buyers without children who will not be tied to a school district or specific job for an extended period of time.
As a prospective home buyer, the best way to set a reasonable budget is to get preapproved for mortgage financing before you start shopping. Once you find out the maximum loan amount you are approved for, shop around for homes that are below that threshold. Your loan officer will also help you select the best loan program to fit your current and future needs and budget accordingly for the down payment. If you have any questions about setting a realistic home buying budget, please let me know.