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Over the past year, home buyers have faced steep competition, which has included fierce bidding wars. Inventory shortages and high demand have forced them to rethink their priorities when shopping for a home.
Eighty percent of buyers say they’ve had to compromise on key home features, according to the Buyer and Seller Insights Report for 2022, produced by HomeLight, a real estate referral company. The most common compromise centered on costs: Forty-eight percent of buyers say they paid more for their homes than they initially expected, the report shows. Thirty-one percent of buyers say they purchased an older home than they initially wanted, and 23% purchased a home that was in worse condition than they hoped.
Buyers in some markets have to compromise more than those in other areas due to varying levels of competition. For example, at least 90% of buyers in markets like San Francisco, Denver, and Sacramento, Calif., say they had to make at least one compromise on the home they purchased. By comparison, 85% of buyers in Phoenix, Los Angeles, Dallas, Houston, and Austin, Texas, say they made a compromise.
While compromises are the norm in a seller’s market, buyers also are finding obstacles while preparing to purchase a home. Affordability is the top challenge home buyers face in the current market, according to the 2022 Obstacles to Home Buying, a new study released by the National Association of REALTORS® and Morning Consult. Finding homes that fit buyers’ criteria, competing with multiple offers, and saving for a down payment also are commonly cited challenges. Homebuying obstacles, however, can vary by race and ethnicity, the study finds.