Aspiring First-Time Buyers Persevere in Hot Market
March 25, 2021
Between rising home prices and shortages of homes for sale, the market has been difficult for buyers, with those trying to buy for the first time particularly feeling the effects. A don’t-give-up mindset may be key for first-time home buyers.
Forty-three percent of more than 800 prospective home buyers recently surveyed by realtor.com® say they’ve been searching for a home for more than a year. One-third of respondents say they’ve been in the market searching for a home between six and 12 months.
“Americans, even millennials who many thought would never buy, have a strong preference for homeownership for the same reasons many generations before them have—to invest in a place of their own and in their communities, and to build a solid financial foundation for themselves and their families,” says George Ratiu, realtor.com® senior economist. “However, today’s first-time home buyers face unprecedented challenges brought on by a lack of available homes for sale and double-digit price growth. They are resilient, though, with many in the market searching for their home for more than a year.”
With housing inventories at all-time lows and list prices rising rapidly, first-time home buyers are finding it challenging to close on a home. Thirty-four percent of respondents said they are unable to find a home within their budget.
Still, first-time buyers comprised 31% of existing-home sales in February, down only slightly from 32% a year earlier, according to the National Association of REALTORS®’ latest existing-home sales report.
Here are additional highlights from realtor.com®’s survey:
The top reasons first-time home buyers want to buy: “I want to be a homeowner” at 59%; “I want to live in a space that I can invest in improving” at 33%; “The need for more space” at 31%; and “I want to build equity” at 22%.
What factors are delaying home purchases: Not enough money for a down payment (44%) and unable to find a home within their budget (34%).
Top factors in a home search: Location (38%); quiet location (33%); large backyard (32%); and garage (29%). Also, 43% indicated they wanted a move-in-ready home, while only 11% said they were willing to purchase a fixer-upper.
Read insights from NAR’s newly released 2021 Home Buyer and Seller Generational Trends report for more on generational buying habits:
Updated: July 30, 2021