The majority of today’s first-time buyers would prefer to forgo starter homes for properties that will meet their future needs, and almost all of them are willing to make sacrifices in order to realize their homeownership dreams.
That’s according to Bank of America’s first-ever Homebuyer Insights Report, which polled prospective homebuyers and current owners to gauge their preferences and attitudes. Seventy-five percent of respondents said that they would opt for a home that meets their future needs, even if it’s not an exact match for their current situations. Sixty-nine percent said that they would postpone buying a starter home to save more money for a nicer property down the road.
Almost all hopeful buyers — 95 percent — would make sacrifices in order to purchase a home. About half would give up nice clothes, new cars, and even their social lives to buy a home, while 44 percent would cut back on traveling. Learning to make sacrifices is a realistic approach for first-time buyers; 76 percent of current owners said they gave up something along with their last home purchase.
More than nine in 10 prospective homebuyers and current owners consider saving money for a down payment or paying off a mortgage important, and 85 percent of first-time buyers would use a tool that automatically stashes away cash. Fifty-nine percent of first-time buyers plan to use dedicated savings to swing the down payment, while 40 percent will recieve help from another party.
Speaking of assistance, two-thirds of millennial first-time homebuyers are expecting some sort of help from mom and dad, be that down-payment money, a hand moving in, or advice on which property to purchase. A near-equal amount of millennials — 70 percent — will allow their families to have a say in their real estate decisions in exchange for the support.
Although some research has indicated that many millennials are postponing homeownership because of student loans, Bank of America’s survey found that debt is delaying 32 percent of Generation Y buyers compared with 43 of Gen Xers. The elder set is balancing a number of other financial considerations besides real estate, including retirement savings, credit-card debt, and their children’s education.
And while purchasing a home can be a stressful experience, buyers appear to be well prepared, reporting very few surprises and nearly three-quarters staying on budget. The survey, which also highlighted trends in 10 U.S. metropolitan areas, underscores the importance of budgeting in expensive regions, with San Francisco homebuyers the nation’s least likely to stick to their financial plans.