Veterans United Launches Homebuyer Readiness Index

Proprietary Index Shows More Buyers Feel Ready to Enter the Market as Optimism About the U.S. Economy Reaches Highest Level in Six Quarters

COLUMBIA, Mo., Oct. 18, 2024 /PRNewswire/ -- Today marks the official launch of the Veterans United Homebuyer Readiness Index, a proprietary measure of financial aptitude and optimism among prospective Veteran and civilian homebuyers created by Veterans United Home Loans, the nation's largest VA lender. Buoyed by growing optimism about the U.S. economy, the latest quarterly index reading shows that prospective buyers are more optimistic about a new home purchase than anytime over the past 18 months.

The index reading for all would-be buyers rose to 67 in the third quarter, the highest yet for the score, which Veterans United began tracking in early 2023. Veterans and service members continue to feel more prepared for homebuying than their civilian counterparts. But the three distinct scores overall were the highest readings yet.

Veterans United Homebuyer Readiness Index

*Civilian sample not included in Q1 2024. This is an average of Q4 2023 and Q2 2024.

The index tracks homebuying sentiment and preparedness using the company's quarterly national survey of Veterans, service members and civilians with near-term homebuying plans, creating unique scores related to four key areas: home purchase time frame, personal financial outlook, outlook on the U.S. economy and purchase motivators. Those unique scores roll up into an overall readiness score.

Optimism about the U.S. economy was the primary driver of homebuyer readiness in the latest quarter. More than half of homebuyers said the economy will be better off in the coming year, marking the first time a majority of respondents have offered a positive economic outlook.

Nearly three-quarters (74%) of Veterans and service members plan to buy in the next year, compared to 69% of civilians. This compares to 67% and 75% during the same period a year ago, respectively.

"This growing confidence in the economy is translating directly into the housing market in communities across the country," said Chris Birk, vice president of mortgage insight at Veterans United. "With inflation showing signs of easing and more consumers believing mortgage rates will stabilize or even decrease, we're seeing a significant boost in homebuying readiness. Although high interest rates and home prices remain a concern among prospective homebuyers, there is growing optimism, especially among Veterans and service members, which could drive increasing demand in the months ahead."

Homebuyer Timeline

Veterans and service members are adjusting their buying timelines, while civilians are showing less intent to buy compared to last quarter.

The percentage of Veterans and service members intending to buy a home in the next three years dipped slightly in the third quarter. But the percentage of those who plan to buy in the next 12 months jumped to 74% in the third quarter from 67% in the third quarter of last year.

Fewer civilian respondents plan to buy homes in the next three years (40% in Q3). The percentage of civilians who plan to buy in the next year fell to 69% in the third quarter from 75% a year prior.

Homebuyer Timeframe Score

*Score is calculated by taking the average of the two time frames. No civilian sample was included in Q1 2024; data shown is an average of Q4 2023 and Q2 2024 used as a proxy.

Personal Finances Outlook

Financial confidence continues to improve, with the Personal Financial Outlook Score reaching 40 for Veterans and service members and 38 for civilians, both the highest readings yet. Nearly half (48%) of Veterans, service members and civilians (47%) reported feeling at ease with their finances.

The third quarter also shows a continued boost in optimism about would-be buyers' own personal finances. About 70% of civilians and 65% of Veterans expect their personal finances to improve over the coming year, up from 58% and 56% a year ago, respectively.

Personal Financial Outlook Score

*No civilian sample was included in Q1 2024; data shown is an average of Q4 2023 and Q2 2024 used as a proxy.

U.S. Economic Outlook

Over the last year, there's been a significant increase in feeling the economy is heading in the right direction. The overall U.S. Economic Outlook Score climbed to 102 in the third quarter, reflecting confidence in the economy and that inflation is easing.

There's also growing optimism about mortgage rates. The percentage of Veterans and service members who think rates will be lower over the next year jumped 10 percentage points quarter-over-quarter (35%), while the percentage who think rates will be higher in the coming year fell to its lowest level in the history of the survey (38%).

Civilian prospective buyers remain more pessimistic about rates than Veterans. Only about a quarter of civilians expect mortgage rates to be lower in the coming year, while nearly half (47%) think they'll be higher.

Economic Outlook Score

*No civilian sample was included in Q1 2024; data shown is an average of Q4 2023 and Q2 2024 used as a proxy.

Purchase Motivators

High home prices and interest rates remain the top two barriers to homebuying for all groups. But recent Federal Reserve rate cuts have both Veterans and civilians feeling significantly better about where mortgage rates are heading.

Just 46% of Veteran prospective buyers cited high interest rates as a barrier to homebuying in the third quarter, down from 52% the previous year. The civilian figure fell seven percentage points, from 46% in the third quarter of 2023 to 39% in the third quarter this year.

Purchase Motivators Score

*No civilian sample was included in Q1 2024; data shown is an average of Q4 2023 and Q2 2024 used as a proxy.

To view the full Veterans United Homebuyer Readiness Index and methodology, visit https://www.veteransunited.com/education/homebuyer-readiness-index/ 

About Veterans United Home Loans

Based in Columbia, Missouri, the full-service national direct lender financed more than $17 billion in loans in Fiscal Year 2023 and is the country's largest VA lender, according to the Department of Veterans Affairs Lender Statistics. The company's mission is to help Veterans and service members take advantage of the home loan benefits earned by their service.

VeteransUnited.com | 1-800-884-5560 | 550 Veterans United Drive, Columbia, MO 65201 | Veterans United Home Loans NMLS # 1907 (www.nmlsconsumeraccess.org). A VA approved lender; Not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency. Licensed in all 50 states. For State Licensing information, please visit https://www.veteransunited.com/licenses/. Equal Opportunity Lender.

SOURCE Veterans United Home Loans