COLUMBIA, Mo.--(BUSINESS WIRE)--The COVID-19 pandemic forced nearly half of Veterans to change their homebuying plans in 2020, but most Veterans are optimistic about buying in 2021 and plan to purchase within the next five years, according to a new national survey from Veterans United Home Loans.
Nearly two-thirds of Veterans believe the next 12 months will be a good time to buy a home, and about 1-in-3 plan to buy this year. A whopping 58 percent of Veterans – that’s 11.3 million people – plan to buy a home in the next five years, according to the survey of 900 Veterans, which was conducted by global research firm Kantar on behalf of Veterans United, the country’s largest VA purchase lender.
“Despite the pandemic’s challenges, Veterans are confident in their finances and the homebuying outlook in 2021 and beyond,” said Chris Birk, vice president of mortgage insight at Veterans United. “Tight inventories and rising rates aren’t likely to keep many Veterans on the sidelines. There’s a big year ahead for Veteran homebuying.”
Key findings from the 2021 Veteran Homebuyer Report include:
COVID-19 affected homebuying plans for 49 percent of Veterans.
Most of those Veterans (43 percent) bought sooner than they planned rather than pausing homebuying efforts entirely (32 percent). About 1-in-5 Veterans (21 percent) decided to refinance.
Veterans are optimistic about their finances and homebuying.
Most Veterans (60 percent) believe their personal financial situation will improve this year. Nearly 70 percent of Veterans expect their income to increase, and 59 percent believe they will be able to get the home of their dreams.
But rising home prices and interest rates, low inventory and the pandemic all loom as potential barriers to homeownership.
Home prices hit record highs last year, partly because of limited housing inventory. A slim majority of Veterans (51 percent) believe homes will become less affordable this year, while 58 percent of Veterans expect mortgage rates to increase. Nearly half (46 percent) of Veterans cited the COVID-19 pandemic as a source of uncertainty and a potential barrier to homebuying this year.
Most Veterans overestimate the kind of down payment and credit score they need for a loan.
Nearly 90 percent of Veterans believe they need at least a 670 FICO score to secure a home loan, while 41 percent believe they need to put down more than 20 percent of a home’s purchase price. Most Veterans have access to the VA loan program, which allows for $0 down and sub-670 credit scores.
“Even if mortgage rates rise this year, it’s still an incredible time to finance a home purchase,” Birk said. “Veterans already had access to the industry’s lowest average fixed rate because of their VA loan benefit. We’re going to be in this window of historically low rates for a while longer, giving Veterans an extended opportunity to lock in lower borrowing costs and even stretch their homebuying budgets. Part of the challenge is simply making sure Veterans understand all of their mortgage options.”
Veterans are split on what 2021 will bring in terms of continued economic recovery in the wake of the pandemic, but they feel much more confident about their own financial situation, which is a positive harbinger heading into the spring homebuying season.
About Veterans United Home Loans
Based in Columbia, Missouri, the full-service national lender financed more than $25 billion in loans in 2020 and is the country’s largest VA purchase lender, a distinction it’s held for the past five years The company’s mission is to help Veterans and service members take advantage of the home loan benefits earned by their service. The company’s employee-driven charitable arm, Veterans United Foundation, is committed to enhancing the lives of Veterans and military families nationwide by focusing on supporting military families and nonprofit organizations that strengthen local communities. Veterans United Home Loans and its employees have donated more than $60 million to the Foundation since its founding in November 2011. Learn more at EnhanceLives.com.
VeteransUnited.com | 1-800-884-5560 | 1400 Veterans United Drive, Columbia, MO 65203 | NMLS ID #1907 (www.nmlsconsumeraccess.org). A VA approved lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. Equal Opportunity Lender. Mortgage Research Center, LLC.