The Needs and Wants of Parents Buying Homes

The Needs and Wants of Parents Buying Homes

The Needs and Wants of Parents Buying Homes

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 daycare, 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, according to the Zillow Group 2018 Consumer Housing Trends Report. 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. The commute was also highly important to parents (66.4%) compared to non-parents (43.3%).

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