Interest rate hikes and all-cash offers made homebuying challenging for service members and Veterans in the market last year, but most are optimistic about homebuying in 2023, according to a new national survey by Veterans United Home Loans.
Even with the rocky rate and affordability outlook, 30% of current service members and 15% of Veterans plan to buy a home in 2023. Looking further, nearly three quarters of current service members (71%) plan to buy a home in the next five years.
"Despite continuing challenges in the housing market, service members and Veterans feel they will be in a great position to buy this year," said Chris Birk, VP of mortgage insight at Veterans United. "A major reason why is their hard-earned VA loan benefit. Nearly 80 years later, this transformational benefit is still helping Veterans get a foothold in the housing market and create generational wealth."
Key findings from the 2023 Service Member and Veteran Homebuyer Report include:
- High home prices are the top reason that impact the decision to buy a new home among service members and Veterans, while uncertainty of income was the last reason. About 56% of service members and Veterans think it will be very or somewhat difficult to buy a home in the next year.
- Reserves and National Guard members are the most optimistic about buying in the next year (43%) compared to active duty at 20% and Veterans at 15%.
- Almost 70% of active duty military members surveyed are renting or live in base housing with only 29% owning homes, vs. 61% of Guard/Reserve and 58% of Veterans that are homeowners.
- The ability to buy without a down payment is the top reason Veterans choose a VA loan, followed by competitive interest rates and limits on closing costs and fees.
- There’s a direct relationship between knowledge of the VA home loan and proximity to military bases. Awareness diminishes the farther one travels from active duty facilities, meaning reserve component service members and Veterans are less likely to be as knowledgeable about their benefits.
- Some service members and Veterans are not aware of their eligibility, which can cause some to pay more money out of pocket. Nearly half of service members and Veterans who haven’t had a VA loan believe that other loan options may be more affordable and easier to use. About 25% are unaware of their benefit or didn’t think they would qualify.
To read the full report, including more data, charts and methodology, click here.