SANTA CLARA, Calif.,
March 25, 2021 /PRNewswire/
-- Homeownership is very much a part of the American Dream,
even for millennials, long considered "the rent generation," a new
realtor.com® survey finds. However, rising prices and a shortage
of available homes for sale is making it more difficult for people
to achieve their goal.
The realtor.com® HarrisX survey of more than 800
prospective homebuyers who plan to purchase their first home in
2021 sheds light on the aspirations and challenges facing those who
are embarking on one of life's biggest financial decisions.
"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," said
realtor.com® Senior Economist George Ratiu. "However, today's first-time
homebuyers 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."
The survey found 43% of those queried have been searching for
their home for more than a year. One-third (33%) of the respondents
have been in the market between six and 12 months, an indication
that buying a home in today's market is not easy. Approximately one
in seven -- 14% -- have been searching for three to six months and
10% just entered the market in the last three months.
I want to be a homeowner and build equity
Long
considered an important fabric of the American Dream, becoming a
homeowner remains the No. 1 reason this year's first-time
homebuyers are in the market. Three of the top four responses
centered on the financial benefits of owning a home. When asked,
"Why are you planning to buy a home?" The top response, at 59%, was
"I want to be a homeowner". "I want to live in a space that I can
invest in improving" ranked second at 33%, followed by the "need
for more space" at 31% and "I want to build equity" at 22%.
Homeownership ranked as the top choice across all generations
surveyed -- Gen X and older (40+) at 68%, millennials (aged 24-39)
at 62% and Gen Z (18-23) at 45%. Millennials ranked the need for
more space second among their reasons for buying a home, while Gen
X and Gen Z both cited being able to invest in a property at
34%.
A needle in a haystack
When asked why they have yet to
purchase a home, 44% responded that they don't have enough for a
down payment and 34% stated that they haven't been able to find a
home within their budget. This points to affordability and lack of
homes on the market as significant challenges facing first-time
homebuyers, especially this year when inventory is at an all-time
low and listing prices have been growing at double digits for more
than six months.
Millennials -- many of whom have been saddled with student loans
-- are struggling the most to save, with 47% responding that the
biggest obstacle to finding a home has been coming up with money
for a down payment. This also was true for 44% of Gen X and 38% of
Gen Z respondents. Millennials also are having the hardest time
finding a home within their budget at 37%, followed by 33% for Gen
X and 30% for Gen Z.
Location, quiet location...
The old adage when it
comes to real estate is it's all about location, and this year's
first-time buyers reinforced that. At 38%, location ranked as the
top feature potential homebuyers are looking for, followed by a
quiet location at 33%, a large backyard at 32% and a garage at
29%.
Gen Z ranked location as their No. 1 choice at 37%, followed by
garage at 35% and updated kitchen at 26%. Quiet location and large
backyard tied for fourth with the youngest cohort of buyers at 25%.
For millennials, location tops the list at 40%, followed by a large
backyard at 37% and quiet location at 32%. Potential buyers aged 40
and over are looking for a quiet location (43%), location (35%) and
a good community/neighbors (33%).
Despite the popularity of reality home improvement shows, only
11% of this year's first-time homebuyers say they are willing to
take on a fixer-upper with 43% indicating they want a move-in ready
home. The remaining 46% said they would be willing to take on some
repairs.
Searching online, saving are important first
steps
When asked what they did first when they decided to
purchase a home this year, 29% said they started searching online
with nearly a third checking listings at least once a day, if not
more. Finances are top of mind for many first-time homebuyers with
nearly a quarter (24%) responding that they began saving money and
changed their spending habits, while 20% figured out their
budget.
The most common way to save is setting aside a certain amount
from each paycheck (50%), while 45% said they also cut out
discretionary expenses, such as gym memberships and eating out for
lunch. Twenty-nine percent put away lump sums from annual bonuses,
tax returns and gifts.
With a majority of respondents having been in the market since
last spring, they are fully aware of the competition they are
facing. Fifty-three percent expect a lot or some competition with
one in five first-time homebuyers expecting a lot of
competition.
Methodology: Realtor.com® commissioned HarrisX
to conduct a national survey of consumers. The total sample size
was 830 adults. The survey was carried out online. The figures are
representative of all U.S. adults (aged 18+) who were identified as
likely first-time buyers. The sampling margin of error of the
survey was +/- 3.6 percentage points. Results were weighted for
age, gender, region, race/ethnicity and income where necessary to
align them with their actual proportions in the population.
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
Janice
McDill, janice.mcdill@move.com
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SOURCE realtor.com