The ultra-competitive housing market may be particularly tough on first-time home shoppers. First-time buyers don’t have the equity of a previous home to sell either to help fund their next house purchase. They must rely on savings—and the amount they need has been quickly growing. Home prices have climbed by double-digits annually over the past year alone.
More than a quarter of hopeful first-time house hunters were unsuccessful at purchasing a home in 2021, shows a new survey of 500 aspiring first-time home shoppers conducted by realtor.com®.
“Despite a challenging year, aspiring first-time home buyers are surprisingly optimistic about 2022,” says George Ratiu, manager of economic research at realtor.com®. “They’re looking at the new year as a fresh opportunity to make their dreams of owning a home come true and our survey suggests that they’re armed with information and ready to compete for their first home.”
Many first-time home buyers recently surveyed say they’re ready to expand their budget if need be. Thirty-two percent of first-time buyers said they’d be willing to pay 1% to 5% above the list price, 17% would be willing to pay 6% to 10% above the list price, and 7% were willing to pay 11% 15% over the list price to get the home they want. Thirty-nine percent of respondents said they would not be willing to pay more than the asking price.