When first-time homebuyers make the jump from renting to homeowning, they have to ask “is it affordable?” According to the Bank of America Homebuyer Insights Report, the answer for the most part is yes. Many first-time homebuyers, particularly millennials, have found that owning a home has a more positive impact on their finances than renting.
According to the report, 86 percent of millennial homeowners find homeowning to be more affordable, and 79 percent of millennials believe homeowning will have a positive impact on their long-term financial picture. Overall, 72 percent of homeowners across all age groups feel the same way.
“Clearly, the millennial generation is coming of age and realizing it might not make sense to wait anymore to purchase their first home,” said Bank of America Consumer Lending Executive D. Steve Boland. “While ‘dreamers’ told us last year that they want to skip the starter home in favor of a house that suits their needs over the long term, the overwhelming majority of millennial homeowners say their current home is a ‘stepping stone’ to their forever home”
Within the next two years, one in four prospective buyers pan on buying a new home. Many of these buyers have already begun planning for a down payment. Bank of America reports that 35 percent of all first-time buyers have begun planning. Almost half of the surveyed first time buyers believe that they would qualify for a down payment assistance program.
Finances are the biggest factor considered when first-time homebuyers are looking into buying a home. Over half of prospective buyers, 52 percent, mark having the financial means to purchase as the trigger to buying a new home.
The thriftiness of first time millennials homebuyers is reflected in the homes they’re choosing as well. Many of these new homebuyers prefer fixer-uppers over move-in ready homes. Only 41 percent of millennials would buy a move-in ready home, compared to 55 percent of gen xers and 66 percent of baby boomers. Additionally, first time buyers are more likely to perform home improvements themselves, rather than pay someone to do them.
Though they may not all be buying fixer-uppers, 70 percent of homeowners report that they spend a lot of their free time working on their home, and 82 percent report that they look for ways to increase the value of their home. However, value goes beyond money, as nearly every respondent stated that they are proud of owning their home, and treasure the memories made within it.
Read Bank of America's complete Homebuyer Insights Report here.