This year could be the year of the first-time homebuyer. Of course, that’s what experts said last year too. But this year it might actually happen.
Of course, there remain barriers to entry – tight credit, inventory shortages, high and rising prices – but pressure is building behind them. There is a huge pool of renters and “adults” living at home starting to form families. And as we reported last year, prospective first-time homebuyers are now more economically secure than most Americans and have expressed an acute desire to own. For agents, ignoring this demographic could prove a profound mistake.
But what do first-time home buyers want in a home? A survey from realtor.com gave us the answers.
Goals of buying
Above all else, first-time homebuyers want privacy. They’re sick of living in apartments with paper-thin walls, or under the scrutiny of their parents. They want a place of independence, a place where they can quietly raise a family.
|Goals of Buying||First-Time Buyers|
|*Based on a 100-point scale|
Motivations for buying
It should come as no surprise that first-time buyers are buying because: 1. They’re tired of their current living situation, and 2. They’re getting more serious with their spouse. One of the more telling things from the survey, however, is their preference for a safe neighborhood. Despite the urgency first-time homebuyers are clearly feeling to head out on their own, they’re still putting a priority on security.
|Motivations for Buying||First-Time Buyers|
|Tired of current home||34%|
|Getting married/moving in with spouse||30%|
|Looking for safer neighborhood||22%|
|Planning an increase in family size||20%|
|Increase in family size||20%|
Time frame for purchases
While there is a small group of first-time buyers (23 percent) in a rush to purchase, most are content to take their time. Almost two-thirds of first-time buyers expect to wait at least seven months before making a decision on a home.
|Time Frame for Purchases||First-Time Buyers|
|Within 1 month||3%|
Most preferred purchases
“Safer neighborhood,” there it is again – a sign that first-time buyers are serious about their safety (and the safety of their newly formed families). Agents, take note.
|Most Preferred Purchases||First-Time Buyers|
|More living space||8.986|
|Quality of construction||7.566|
|Proximity of good schools||6.954|
|*Based on a 100-point scale|
A cursory look at first-time homebuyer preferences might surprise some agents, as relatively few are looking to purchase in an urban area (the places that tend to attract younger crowds). However, a closer analysis – one considering cost – will lend some insight into the table below. First-time homebuyers are looking for not only an affordable place, but one in a safe neighborhood; and for that, they often need to go to the suburbs.
|Location Preferences||First-Time Buyers|
|Suburbs (closer to urban core)||23%|
Property type preference
One of the most unique characteristics of first-time buyers, according to realtor.com’s survey, is their preference for townhouses. They were the only group surveyed that favored them over detached, single-family homes. The explanation is likely price.
|Property Type Preference||First-Time Buyers|
Impediments to purchase
As is expected with first-time homebuyers, their biggest impediments to purchase (apart from the fact that their search is only just beginning) is cost. Ninety-five percent of first-time buyers either can’t afford a downpayment, can’t find a house in their budget, or are having a hard time getting financing because of bad credit.
|Impediments to Purchase||First-Time Buyers|
|Just starting to explore||41%|
|Can’t afford downpayment||37%|
|Can’t find home in budget||30%|
|Haven’t found a house that meets needs||27%|