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Last year, amid soaring interest rates and dampening buyer confidence, home sales slowed. In the US, according to the National Association of REALTORS® (NAR), existing single-family home sales in 2023 dropped by 18.3% from 2022. In Canada, the Canadian Real Estate Association (CREA) found that national Canadian home sales in 2023 were down 11.1% from 2022. But despite this climate of economic uncertainty, homeowners across the US and Canada feel overwhelmingly positive about homeownership. Zoocasa, in partnership with eXp Realty, surveyed over 1,500 North Americans about their homeownership satisfaction, homebuying plans, and overall real estate outlook.
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Majority of Homeowners Think Homeownership is Worth It
When it comes to the joy of homeownership, age is irrelevant as our survey found there’s no generational divide on homeownership satisfaction. Homeowners of all ages overwhelmingly expressed positive feelings about homeownership with 59.5% of homeowner respondents saying they are very satisfied with homeownership and 25.6% saying they are satisfied with homeownership. Only 2% of homeowners said they were very unsatisfied with homeownership.
Even considering the current real estate climate, the majority of homeowners maintain a positive outlook on homeownership, with 81.4% recommending it to others. This positive sentiment is further bolstered by the fact that 56.7% of homeowners strongly agree that owning a home provides a sense of security and stability, while 63.5% of homeowners feel they have significantly more freedom to make renovations and modifications compared to when they were renting.
However, it’s not just homeowner perception that is helping to drive this positivity; home prices have been steadily increasing, especially after the pandemic, meaning homeowners have been able to build up quite a large amount of equity. Of homeowner respondents, 43.2% have seen their homes increase in value by more than $300,000, while home values have increased by more than $100,000 for 26.2% of homeowner respondents. This is a significant amount considering that the majority of homeowner respondents bought their home within the last 10 years.
Further highlighting the long-term value of investing in homeownership is the fact that 86% of homeowners believe they are better off financially compared to renters in their area and 35.5% of homeowners said their average mortgage payment is much lower than the average rent in their area.
Most Homeowners Feel Financially Secure But Economic Concerns Remain for Gen X and Millennials
When asked about their level of financial stress due to homeownership, 28.4% of homeowners said they are not stressed at all about finances, however, this answer varies based on generation. Among Baby Boomers, Gen X, and Millennials (with a negligible number of Gen Z and Silent Generation respondents participating in the survey), Baby Boomers report the lowest levels of financial stress related to homeownership, with 44.4% stating they are not stressed at all about finances. This contrasts with 20.2% of Gen X and 11% of Millennials who report no stress at all. On the other end of the spectrum, 14% of Millennial homeowners and 10.8% of Gen X homeowners reported that they were very stressed about finances while only 4.3% of Baby Boomers said so.
Even so, the majority of homeowners expressed confidence in their ability to comfortably make their mortgage payments even if interest rates were to rise, with 35.9% saying definitely yes they could make their payments and 28.5% saying probably yes they could make their payments. Once again, Baby Boomers emerged as the most financially secure generation, with only 4.1% indicating they definitely could not manage their payments if rates went up. In contrast, economic uncertainties seemed to affect Millennial and Gen X homeowners more, as 9.4% of Millennials and 8.7% of Gen X said that rising interest rates would mean they definitely could not afford their mortgage payments.
Non-Homeowners Dream of Homeownership But Economic Hurdles Stand in the Way
Among survey respondents who are not homeowners, 50.9% cited high home prices as the main reason contributing to their decision to not own a home. Other reasons include high borrowing costs (21.8%), living costs (11.8%), pre-existing debt (7.7%), and low supply of homes (4.1%). Despite this, 81.1% plan to buy soon, preferring detached homes (58.1%) over condos (15.8%).
However, 83% can’t afford the average home in their area, likely contributing to why the majority of non-homeowner respondents said they will wait a year or longer to make their home purchase (68.5%). Non-homeowner respondents were largely Millennials at 44.6%, further highlighting generational challenges in accessing the housing market.
If you’re like our readers and are thinking about entering the market in the near future, give us a call! We can help you prepare and plan for your future real estate goals.
Methodology:
The survey was conducted between January 25, 2024 and February 18, 2024. 1,577 Zoocasa blog readers and newsletter subscribers across the US and Canada were surveyed, and the survey consisted of 12 to 27 multiple-choice questions to learn about the current real estate outlook of North Americans. The margin of error is roughly 2%. Generational age ranges were determined based on Statistics Canada’s definitions which are as follows: Gen Z: born between 1997 and 2012, Millennials: born between 1981 and 1996, Gen X: born between 1966 and 1980, Baby Boomers: born between 1946 and 1965.
