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Despite Obstacles, First-Time Homebuyers Still Motivated to Buy

Fed homeownership surveyChase Home Lending has released the findings of its new First-Time Homebuyer Study, analyzing more than 1,100 consumers who indicated that they are looking to purchase a home and are actively preparing to buy. Though the COVID-19 pandemic had a considerable impact, 60% of respondents said they were likely to purchase in the next 12 months, and 69% still see homeownership as an important part of building wealth.

The majority of first-time homebuyers indicated that the pandemic changed their plans on buying a home in 2020. Seventy percent of respondents said they were waiting to see how the housing market would play out last year. Change of income (61%) and re-evaluating how they would finance their home purchase (58%) also had a prominent effect on timelines and urgency to buy.

“The events of the last year upended various aspects of our lives, including prospective homebuyers and their plans to purchase,” said Sean Grzebin, Head of Consumer Originations for Chase Home Lending. “Despite possible income changes and prolonged timelines, buying a home as a means to build wealth and stability still resonates with first-time homebuyers. The research shows that they are also open to making lifestyle changes in order to reach their homeownership goals.”

A recent study by Redfin found that despite bidding wars still taking place in the housing market, more first-time homebuyers are being turned off by record high prices.

Laura Sechrist Molenda, a Redfin Real Estate Agent in Southern California, said, "Two of my buyers just had their offers accepted because the sellers' first buyers backed out. The market is still competitive, but buyers are more trepidatious than they were at the start of 2021, and less willing to pull out every stop in order to win.”

Only one-in-four first-time homebuyers said they were confident enough to financially ready to purchase a home in the first half of 2021–but this didn’t stop them from taking steps to set themselves up for success.

  • Seven of 10 respondents made lifestyle changes in order to work toward homebuying success.
  • 66% have already created monthly budgets and worked to improve their credit score.
  • More than half of respondents plan to research down payment assistance programs this year; 33% have already done so in 2021.
  • 77% of respondents said they are actively saving for a down payment

The study also revealed that nearly three-quarters of Black and Latinx respondents agree that owning a home is an important step to building wealth, slightly above the overall average of 69%. The study found:

  • 48% of Black and Latinx respondents felt knowledgeable or comfortable with the homebuying process while the average for all respondents came in lower at 40%.
  • 65% of minority respondents expect the homebuying process to be enjoyable, which is higher than the overall average of 51%.
  • When it comes to desired features in a home, 51% of Black and Latinx respondents are looking for dedicated office space in their first home (vs. 45% total) and 42% want workout space (vs. 34% total).

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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