SANTA CLARA, Calif.,
Feb. 3, 2021 /PRNewswire/ -- For
first-time homebuyers looking to buy in 2021, a new survey from
realtor.com® indicates that getting finances in order is
a critical place to start. Almost half (47%) of those who bought
their first home last year -- successfully making it through the
most competitive market in recent history -- turned to their
finances before they did anything else.
More than two-thirds of recent buyers were surprised by what
they could actually afford
According to a survey of 1,000
recent and prospective first-time homebuyers in the U.S., conducted
online from Jan. 7-11 by
realtor.com® via HarrisX, more than two-thirds (68%) of
shoppers were surprised by what they could actually afford for
their first home. Forty-seven percent were surprised because their
budget was larger than they thought, and 21% were surprised because
it was less.
"The dramatic decline of mortgage rates in 2020 was a pleasant
surprise for many buyers," said realtor.com® Senior
Economist George Ratiu. "For
first-time buyers, especially, the drop in the 30-year mortgage
rate from 3.65 percent in March 2020
to a record-low of 2.65 percent in January has provided unexpected
leverage. Lower rates allowed many buyers to stretch and buy more
expensive homes while keeping their monthly budget the same."
Compromising on wish list features, or budget, is key
To get what they wanted in their first home, many recent buyers had
to compromise. Twenty-one percent had to expand their search into
less expensive neighborhoods. Twenty percent had to go up in budget
to get it all, and 18% had to eliminate some wish list features --
namely a garage, large backyard, finished basement, and pool -- to
stay in budget.
With competition high, getting outbid is to be expected…
multiple times
Even with shortened wish lists or expanded
budgets, nearly half (49%) of recent first-time homebuyers and more
than a third (39%) of prospective first-time homebuyers said they
fell in love with a home last year that they were outbid on or
later learned they couldn't afford. It happened more than once too:
20% of recent first-time homebuyers were outbid on at least one
home they wanted, and 20% made five or more offers before finally
getting a home.
"You have to know what you can afford before you head too far
down the homebuying road," said realtor.com® Home and
Lifestyle Expert Lexie Holbert. "Putting pen to paper and getting a
real sense of your current monthly expenses and what you're saving
each month is a good place to start when thinking about your
mortgage. Especially as a first timer, it's really important to
stick to your budget when searching online so you don't fall in
love with something you can't afford. Using the monthly mortgage
payment filter on realtor.com® can help you be sure
you're only looking at homes within your price range."
Savings, and help, could mean a downpayment is closer than
prospective buyers think
For the 44% of Americans who've
been planning to buy but don't have enough for a down payment,
their first home might be closer than they think. Half of recent
first-time home buyers were able to save for a home in less than
three years, mostly by setting aside a portion of their paycheck
each month (50%), cutting out discretionary spending (33%), and
saving lump sum money like tax refunds (32%). Plus, help from
family could get you there: 52% of Americans who bought their first
home in 2020 said they got help with their down payment from
friends or family. The number one lender? Their parents.
For more details, see the full report at
https://www.realtor.com/research/first-time-home-buyers-housing-2021.
About realtor.com®
Realtor.com®
makes buying, selling, renting and living in homes easier and more
rewarding for everyone. Realtor.com® pioneered the world
of digital real estate more than 20 years ago, and today through
its website and mobile apps is a trusted source for the
information, tools and professional expertise that help people move
confidently through every step of their home journey. Using
proprietary data science and machine learning technology,
realtor.com® pairs buyers and sellers with local agents in their
market, helping take the guesswork out of buying and selling a
home. For professionals, realtor.com® is a trusted
provider of consumer connections and branding solutions that help
them succeed in today's on-demand world. Realtor.com® is
operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV]
subsidiary Move, Inc. under a perpetual license from the National
Association of REALTORS®. For more information, visit
realtor.com®.
Media Contact: lexie.puckett@move.com
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content:http://www.prnewswire.com/news-releases/affordability-surprises-first-time-homebuyers-while-parental-assistance-savings-and-wishlist-compromises-prove-common-survey-finds-301221105.html
SOURCE realtor.com