A Growing Buying Segment May Offer You a New Niche
January 29, 2021
Veterans are bullish when it comes to homeownership. A recent survey by Fannie Mae showed a slight decline in overall homebuying confidence among the American population, but among veterans, that confidence is growing.
Indeed, 58% of veterans say they plan to buy a home within the next five years, according to The 2021 Veteran Homebuyer Report, produced by Veterans United Home Loans based on a survey of about 1,000 vets. That could amount to 11.3 million potential veteran buyers, the report notes.
“Veterans have a deep desire to own a piece of the American dream they vowed to defend,” says Chris Birk, vice president of mortgage insight at Veterans United, a lending company that works with veterans.
Despite a rise in home prices, vets feel financially ready to buy. Sixty percent of veterans surveyed believe their financial situation will improve during the year. Fifty-nine percent believe they will be able to get the home of their dreams.
Many veterans overestimate the down payment and credit score they need to qualify for a mortgage. Nearly 90% of veterans believe they need at least a 670 FICO score to qualify for a home loan. Also, 41% believe they need to put down more than 20% of a home’s purchase price. Many veterans are eligible for a VA home loan, which requires no down payment. The report found, however, that only 3% of vets said they believed they’d be able to get a mortgage with no down payment.
Like the general population, the pandemic has affected homebuying plans for vets, the survey finds. Nearly half of veterans cited the COVID-19 pandemic as a source of uncertainty and a potential barrier to buying a home this year. But 43% of those surveyed said they bought a home sooner than they had planned due to the pandemic; 32% placed their homebuying plans on pause; and 21% decided to refinance on their current home.
The top 10 reasons vets want to purchase a home are:
- Change of scenery/lifestyle: 25%
- Need smaller home/trading down: 20%
- Need bigger home/trading up: 19%
- Want to be closer to family: 19%
- Family size change with child: 17%
- Income change/right time: 17%
- Tired of wasting money on rent: 16%
- Build more equity for retirement: 15%
- Retiring or cutting back on work: 15%
- Neighborhood no longer desirable: 14%
Updated: October 15, 2021