Survey: First-Time Buyers Often Surprised by Checking Finances
ORLANDO, Fla. – For first-time homebuyers looking to buy in 2021, a critical starting point for is getting their finances in order, according to a new survey conducted by HarrisX for realtor.com. Almost half (47%) of 2020 first-time buyers say they turned to their finances before they did anything else.
More than two out of three (68%) of the first-time buyers who checked their finances said they were surprised at the amount of house they could afford – 47% were surprised because their budget was larger than they thought, and 21% were surprised because it was less.
To get what they wanted in their first home, many recent buyers had to compromise: 21% expanded their search into less expensive neighborhoods, 20% had to increase their budget, while 18% eliminated some wish-list features – namely a garage, large backyard, finished basement or pool – to stay in budget.
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 – but they were outbid or later learned they couldn’t afford it. For many, it happened more than once: 20% were outbid on at least one home, and 20% made five or more offers before finally succeeding.
For the 44% of Americans who plan to buy but don’t think they have enough saved 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 them there: 52% of Americans who bought their first home in 2020 said they got help with their down payment from friends or family: Parents were the No. 1 lender.
Florida Realtors® serves as the voice for real estate in Florida. It provides programs, services, continuing education, research, and legislative representation to about 200,000 members in 51 boards/associations. Florida Realtors® Newsroom website is available floridarealtors.org/newsroom