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 |
|---|---|
| Privacy | 18.28 |
| Family | 15.5 |
| Financial investment | 12.96 |
| Stability | 10.56 |
| Physical comforts | 8.94 |
| *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.
| First-Time Buyers | First-Time Buyers |
|---|---|
| 10-12 months | 24% |
| 1-3 months | 23% |
| 13-18 months | 18% |
| 7-9 months | 15% |
| 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.
| First-Time Buyers | First-Time Buyers |
|---|---|
| Safer neighborhood | 9.693 |
| More living space | 8.986 |
| Larger yard | 7.844 |
| Quality of construction | 7.566 |
| Proximity of good schools | 6.954 |
| *Based on a 100-point scale |
Location preference
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.
| First-Time Buyers | First-Time Buyers |
|---|---|
| Suburbs (closer to urban core) | 23% |
| No preference | 21% |
| Outlying suburbs | 20% |
| Rural area | 14% |
| Urban area | 12% |
| Small town | 10% |
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.
| First-Time Buyers | First-Time Buyers |
|---|---|
| Townhouse/Rowhouse | 39% |
| Single-family home | 32% |
| Multifamily | 15% |
| Condo/apartment | 10% |
| Mobile | 4% |
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.
| First-Time Buyers | First-Time Buyers |
|---|---|
| Just starting to explore | 41% |
| Can’t afford downpayment | 37% |
| Can’t find home in budget | 30% |
| Bad credit | 28% |
| Haven’t found a house that meets needs | 27% |