New research released by TD Bank indicates that nearly one-in-five potential first-time homebuyers are actively looking; nearly two-thirds would like to provide a sizable downpayment of 20 % or more.
CHERRY HILL, N.J. – July 15, 2015 – In the recent past, many first-time homebuyers shied away from the market due to debt and stagnant wages. But new research released by TD Bank indicates that nearly one-in-five potential first-time homebuyers are actively looking; nearly two-thirds would like to provide a sizable downpayment of 20 percent or more.
The TD Bank First-Time Home Buyer Pulse found that 62 percent of potential first-time homebuyers think they will purchase a home within the next two years. Among millennial survey respondents, it rises to 67 percent.
What first-time homebuyers seek
- 68 percent of consumers looking for a first home want move-in ready, while one-third would like to buy a fixer-upper
- 43 percent of consumers want a suburban area; 20 percent want a home in a big city
- With amenities, respondents are most interested in a backyard or pool and an attractive design, followed by energy efficient / smart homes technologies
First-time buyer financing
- The top four financing options include cash savings, a 30-year mortgage, an affordability program and government loan
- 62 percent would like to provide a downpayment of 20 percent or more
- Millennials are more likely to purchase their first home with a partner or spouse (70 percent) compared to potential first-time homebuyers of other generations (49 percent)
- Potential first-time homebuyers value mortgage rates the most when looking for a home
Barriers to homeownership
- When asked what is preventing them from purchasing their first home, respondents most often cited money for a downpayment (64 percent) and the need to pay down existing debt (45 percent)
- 70 percent of millennials said they need to save for a downpayment; 52 percent said they need to pay down debt
- 22 percent said they couldn't find a home in their price range
Hispanic first-time homebuyers
- Hispanic first-timers are keeping their options open in terms of how they plan to purchase their first home. The top three: cash savings, 30-year mortgage and affordability programs
- 46 percent if Hispanics are more likely than the general population (38 percent) to consider affordability programs
- 71 percent will buy their first home with a spouse/partner, compared with 56 percent of the general population
First-time Hispanic buyer home preferences
- 62 percent of Hispanics are interested in a move-in ready home
- 32 percent prefer a home in a big city or urban area, compared with 20 percent of the general population
- The top three amenities that Hispanic first-time homebuyers seek: a backyard or pool, an attractive design, and close proximity to water and green spaces
Hispanics roadblocks to purchasing
- The top four roadblocks preventing Hispanics from buying their first home include saving money for a downpayment, paying down debt, steady employment and finding a home in their price range
- In addition, 22 percent of Hispanics feel like they can't find a home that meets their needs and wants
- 46 percent plan to buy their first home in the next one to two years; 38 percent plan on purchasing in the next three to five years
The study was conducted from June 11 – June 16, 2015 among a nationally representative group of consumers who are not currently homeowners and are considering purchasing a home in the next five years. The sample size of 1,002 has a margin of error of +/- 3.1 percent. Data has been weighted by age, gender and region to reflect the populations. Vision Critical hosted the survey.
© 2015 Florida Realtors® All rights reserved. Reprinted with permission.