- Almost half of home buyers and a third of renters who moved in the past year have children who are under 18 and live at home. And 56.6% of buyers who had or adopted a child in the past year said it influenced their move.
- Buyers with children at home are more likely to go over budget than those without, and of those who stick with their budgets, two-thirds make compromises to do so – a greater share than the roughly half of buyers without kids at home who make compromises.
Having children changes people, and for home buyers that translates into vastly different wish lists and budgetary constraints.
Once fans of happy hour and eating out, new parents find they're lucky to make it to the grocery store and back. The desire to be trendy or able to walk to favorite shops gives way to the need to provide their child with safety, enrichment and healthy habits.
Ideas about commutes change as well. While a long commute can be a trade-off for a bigger or more affordable home, that time on the road for a parent with small children can mean a post-work crunch: Picking a child up from day care, making and eating dinner and getting the little one to bed at a decent hour.
Add to that the fact that peak child-raising years often coincide with peak career demands, and location becomes doubly important – and doubly tricky.
As a result, the home-shopping process for buyers with children who are under 18 and living at home is more arduous: They are more likely to see an offer or mortgage financing fall through, and they're more likely to go over budget. That's despite attending more open houses and making more compromises to stick to their budgets.
After they've hurdled the challenges, buyers with kids at home overwhelmingly love the homes they purchased.
Reconciling budgets, mortgages and needs
Almost half of buyer households (45.9%) and a third of renters (33.1%) who moved in the past year have children who are under 18 and live at home. And 56.6% of buyers who had or adopted a child in the past year said it influenced their move.
Buyers with children at home are more likely to go over budget (25.7%) than those without (21.2%), perhaps to attain the location and amenities on their long wish lists.
Still, the majority of buyers with kids at home stay within their budgets (74.3%), often because they make compromises. Two-thirds (66.5%) made some type of compromise to stick with their budgets, considerably more than the 51.6% of buyers without kids.
Among parents who made such a compromise, the top ones were increasing their commute (34.1%), purchasing a home without their desired finishes (32.7%) and purchasing a smaller home than planned (31.2%).
The financial stretch for parents is visible in their down payments. In order to afford their homes, 54.7% of buyers with children at home had down payments of less than 20%, compared with 49.2% of buyers without kids at home.
Parents also are more likely to worry about qualifying for a mortgage (64%) compared with non-parents (44%), and it turns out their concerns are warranted. Almost a third (31.5%) of buyers with children who eventually obtained a mortgage experienced a denial versus only 11.5% of buyers without kids at home.
All that, plus the kitchen sink
Most buyers with children under 18 hoped to buy single-family detached houses (83.7%), which tend to be more expensive than townhomes and condos. They also had long home and neighborhood wish lists.
Parents place greater importance on nearly all home characteristics than buyers without kids living under their roofs, being more attached to everything from storage space to a particular number of bedrooms. Having a child's needs in mind can add urgency – and parents of young children might be anticipating future needs without being sure which features will be most important as their children grow.
Buyers with children are more likely to rate a private outdoor space as very or extremely important (75.3%) compared to buyers without children at home (65.1%). Similarly, a home's potential to increase in value was highly important to 73% of parents compared to 61.5% of non-parents.
To attain their long wish lists, buyers with kids are willing to expand their searches to include foreclosed homes, short-sales and homes for sale by owner.
Location, location….
Parents are less likely to give up on location. Every single neighborhood characteristic included in the study was more important to buyers with kids at home compared to those without.
They're often balancing the desire for a decent commute with wanting a particular school district and other child-focused needs. So, it makes sense that they are more likely to end up purchasing in the area they initially considered (71.8%) than buyers without kids at home (66.2%).
Not surprisingly, purchasing in the preferred school district was very or extremely important to 66% of buyers with kids at home, compared to only 22.9% without. Commute was also highly important to parents (66.4%) compared to non-parents (43.3%).
Grueling search
To find the home with the right features in the right location, parents face a daunting task.
Buyers with kids at home attend more open houses and are more likely to have an offer fall through. Only 52% of buyers with children successfully purchase with their first offer compared with 62.7% of buyers without children at home.
Renters who are parents have it especially tough. Renters with children in the home fill out 1.9 times as many applications (4.8 on average versus 2.5) compared with renters without kids in the household. They also search longer to find their home (3.4 versus 2.3 months on average) than renters without children in the household. Finding a home may be harder for parents who rent, because many rentals do not have the number of bedrooms, storage and other features they seek – and they aren't able to renovate and make other changes. On top of that, many renters with children are financially vulnerable: More than half (54.1%) saying they couldn't afford a $1,000 unexpected expense, compared with 45.5% of renters without children at home.
Worth the journey
At the end of their long journeys, the vast majority of parents who recently moved into a home recently say they love it. This is especially true of buyers with children at home: 94.6% say they love their home compared with 91.8% of buyers without kids at home.
Most renters with kids at home love their home too, but not to the same degree as buyers. Some parents view their rental home as temporary, which may lead them to not form the same level of attachments. Seventy percent of renters with children in the household love their home, about the same as renters without kids at home (72.3%).
The post Parents Buying Homes: Long on Wish Lists and Breaking the Budget appeared first on Zillow Research.
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