Survey: With Economic Optimism Rising, More Veterans Move Up Their Homebuying Timelines

Heading into the spring homebuying season, more Veterans and service members are accelerating their purchase plans, buoyed by rising optimism about the economy and mortgage rates.

Among would-be homebuyers, 42% plan to purchase in the next six months, up five percentage points from the fourth quarter of 2023 and up a whopping 15 points compared to the third quarter, according to Veterans United Home Loans’ most recent Veteran Homebuying Report, a quarterly national survey of Veterans and service members who intend to buy homes in the next three years.

In all, 71% of Veterans plan to buy within the next year, up slightly from the fourth quarter.

Veterans are moving up their homebuying timelines in large part because they’re feeling more confident about their financial future, along with the country’s.

"Veterans and service members are increasingly optimistic about their own finances and where the national economy is heading, which continues to translate into more Veterans moving up their homebuying timelines," said Chris Birk, vice president of mortgage insight at Veterans United. “Rates, rising home prices and tight inventory are still major concerns, but more and more Veterans are heading into spring and summer homebuying feeling like they can make this dream a reality."

Veterans Bullish on Economy, Homebuying

Nearly two-thirds (64%) of Veterans and military members expect to be better off financially over the next year, up eight points from the third quarter and nearly returning to optimism levels not seen since the first quarter of 2023.

Meanwhile, more than half (55%) feel capable of getting a new mortgage right now, up from 49% in Q4.

They’re even more bullish on the U.S. economy.

The survey’s economic outlook score jumped 14 points quarter over quarter, with more Veterans expecting interest rates, inflation and the overall economy to improve.

A little more than 4-in-10 Veterans think the economy will be better off over the next year, up from 34% in the fourth quarter. At the same time, fewer than half of Veterans (47%) believe inflation will continue to rise over the next year, a first in the year-long history of the survey.

Average mortgage rates have been up and down to start the year, but prospective buyers continue to expect rate relief in the coming months.

High rates and high home prices remain the top two barriers to homebuying for most Veterans. But the spotlight is starting to shift toward housing inventory as more Veterans consider buying sooner.

More Inventory Gets More Veterans Moving

Inventory has shown signs of life over the past few months after lingering near record lows in recent years. The typical February day saw about 15% more homes on the market than the year prior, but inventory that month was still down about 40% compared to the 2017-2019 time period, according to data from Realtor.com.

With economic optimism on the rise, an increasing number of Veterans say a boost in inventory would lead them to buy a home sooner.

Veterans are also split on whether they feel in control of their homebuying journey (40%) versus having the housing market dictate their next steps (42%).

“Even as interest rates fall, limited inventory will remain a barrier for prospective buyers over the long term, as well as a factor that likely drives home prices further north," Birk said. “For many Veteran buyers, part of the calculus is whether to buy now and refinance later or wait for rates to fall before looking at houses. But waiting might also come with a cost in the form of higher prices spurred by low inventory and pent-up demand."

Home Seller Expectations & Worries

Survey responses from current homeowners who plan to buy again offered more of a mixed bag.

Among current homeowners, 70% plan to sell their current home when buying again, a nine-point jump from Q4. Compared to last quarter, more Veterans are optimistic about getting the sale price they’re after and about whether now is a good time to sell.

But some sellers are increasingly worried they won’t get top dollar for their home sale because of the tough environment facing buyers.

Still, nearly a quarter of Veteran homeowners say they have no worries at all about selling their home.

Additional Findings

Some other key findings from the latest Veteran Homebuyer Report:

• Veterans are split on whether they would rather buy now knowing they can refinance later (39%) or would rather wait until the market is better (39%).
• More Veterans are willing to increase their homebuying budget to get what they want (7-point jump from Q4).
• hen it comes to deciding where to live, crime (71%), cost-of-living (68%) and access to fresh food and groceries (60%) are the top considerations for Veterans.
• Just under a quarter of Veterans (24%) feel stressed about their financial situation, down from 27% in Q4

Methodology

On behalf of Veterans United, data and research firm Sparketing conducted an online survey of about 600 Veterans and service members from March 1-15, 2024.

We surveyed service members from both the active and Reserve components, as well as Veterans.

For the purpose of this survey, active duty military are full-time members of the Armed Forces. The Reserve component includes drilling National Guardsmen and Reservists. Veterans are military members who have been discharged or retired from the service and no longer serve in uniform.