Optimism Returns with Homebuyers In Tow

People who were hesitant to buy a home in 2020 seem to be feeling more confident, according to a study conducted by the Harris Poll in December for NerdWallet. In fact, around 26 million Americans plan on purchasing their first home within the next five years.

And the optimism is spreading. Eleven percent or 28 million people have plans to purchase a home within the next 12 months, and 59% of those people say they’re far more optimistic about purchasing in 2021 than they did in 2020.

Many factors are shaping this new optimism. Remote work and school, for example, have allowed people to live further away from their jobs and campuses, giving them the option for larger homes and amenities they wouldn’t usually have in the bigger cities.

However, purchasing a home isn’t easy for everyone, and 83% of those intending to buy within the next 12 month expect to experience financial stress because of their decision.

That’s because maintaining a home can be very expensive. When asked about the biggest financial stresses they might face within the next two years, 41% of respondents said home repairs and maintenance topped their lists. Over a quarter cited the mortgage payment as being their top source of financial stress.

Even with the daunting possibility of repair bills, people are still looking forward to purchasing homes. And many more are ready because of hope that the pandemic will end.

In fact, 39% of potential homebuyers in 2020 halted their plans because of the coronavirus. And of the 43% who went through with their 2020 home-buying goals, they faced a difficult market with low inventory, speedy sales, and skyrocketing prices.

Not to mention, qualifying for a mortgage got increasingly difficult. With such low rates available, it seemed everyone wanted to purchase or refinance. Banks and lenders responded by requiring better credit scores and more liquidity. But there are options for those with less-than-perfect credit and no down payments.

“FHA and VA loans are designed for people with small down payments and less-than-perfect credit, but who otherwise are in sound financial shape,” said Holden Lewis, NerdWallet home and mortgage expert. “VA loans, which are guaranteed by the Department of Veterans Affairs, allow for a zero percent down payment, and they’re a great deal for veterans, active-duty service members and others who qualify.”

Homeownership is an attainable goal for millions of hopeful people around the country, and their optimism isn’t misplaced.