Although 55 % believe the market is more competitive than last year , about 54 % said they either plan to speed up their home purchases or buy when they originally planned , according to a bank survey . That includes 62 % of Gen Z and 55 % of millennials , according to Bank of America ’ s “ 2023 Homebuyer Insights Report .”

The report , based on a survey of 500 homeowners and 500 renters , found that 39 % believe the market favors sellers , while 18 % said it favors buyers and 31 % said it ’ s neither .

And while nearly 40 % of prospective home buyers indicate that they are more confident in their ability to buy a home today than last year , they still cite challenges , including high prices and interest rates ( cited by 51 % of the respondents ), the lack of cash reserves for down payments ( cited by 37 %) and low credit scores ( cited by 37 %).

Still , 69 % of respondents said they plan to buy a home when it ’ s right for them , regardless of prices and interest rates .

Financial security is a motivating factor in their quest to own a home , with 47 % of prospective buyers indicating that they would buy a home in the current housing market because they have had enough of renting and rent increases . Twenty-eight percent said they want to start building equity . An equal percentage of Gen Z and millennials , 56 % of both groups , said they plan to purchase a home in the next two years , which was almost the same as the percentage of Gen Xers who said so , 58 %.

As for how they would finance their purchase , respondents said they would be willing to commit 25 % of their monthly income toward mortgage payments for a starter home and 30 % for a forever home , compared with the 29 % they would be willing to put toward monthly rent . Furthermore , 55 % of respondents said they plan to purchase a home with a spouse or partner , while 38 % said they are planning to go it alone .

More than two-thirds of prospective buyers ( 67 %) are actively looking at homes for sale , according to the survey . Fifty-seven percent are scouting prices in certain areas , 52 % are

Forty-seven percent of prospective buyers indicate that they would buy a home in the current housing market because they have had enough of renting and rent increases .

scrolling through a real estate marketplace app with a certain budget in mind , 50 % are researching for-sale homes in their area or neighborhood , 44 % are familiarizing themselves with the home-buying process , and 31 % are visiting open house events for fun .

— FA Staff ments ,” Smith says . “ Historically , the IRS has done a poor job auditing large partnerships and S corporations .”

Deductible business expenses are another potential area of interest for the IRS , Primeau says .

“ Another area could be to scrutinize the expenses business owners are running through their companies , to ensure those expenses are legitimate business expenses versus personal , non-deductible expenses ,”

Primeau adds . “ Some business owners abuse this opportunity , and my guess is the IRS will be taking a much closer look at this area .”

Advisors say clients should think carefully about risky tax moves . “ You may have slipped through the audit cracks in the past , but it ’ s less likely you ’ ll do so in the future ,” Smith says . “ Make sure that your passthrough investments are with reputable companies who are not being overly aggressive in their tax reporting .

“ If you ’ re on the fence with regard to the $ 400,000 threshold ,” Smith adds , “ resist doing something shady to go from $ 500,000 to $ 399,000 of income thinking that you ’ ve pulled a fast one on the IRS .”

Keep in mind : IRS enforcement has become a political issue . With both Republicans and Democrats in disagreement , the enforcement environment could change once again .

— Jeff Stimpson

JUNE 2023 | FINANCIAL ADVISOR MAGAZINE | 11