Thinking about diving into the world of homeownership for the first time? Well, you're not alone.
Nick Boniakowski, Head of Agent Partnerships at Opendoor, says, “Right now, first-time homebuyers are in a bit of a pickle. They’re keeping an eye on mortgage rates and home prices, while sellers remain on the sidelines - at least, for now.” Despite these hurdles, folks are sticking to their guns and going after their dream of homeownership, whether they’re doing it with a partner, a friend, or flying solo.
We've examined Opendoor's recent survey data and gained additional insights from Boniakowski regarding first-time homebuying trends. Here are 5 Big Changes for First-Time Home Buyers in 2024:
1. Team Effort: Increasing Numbers of People Joining for Homeownership
The survey uncovered that a whopping three out of four first-time buyers (that’s 77%) are teaming up with someone else to make their homeownership dreams a reality. While many still buy with their romantic partners (around 61%), others are jumping in with friends (making up 11%). Interestingly, most of these friends are men (about 62%).
“Buying a home is a big step, and it's not easy to do alone,” says Boniakowski. “Teaming up can be a smart move, especially if you don’t have all the cash upfront for a down payment. Sharing costs can make homeownership more attainable.”
And even though partnering up is on trend, there are still plenty of folks going it alone. In fact, 23% of first-time homebuyers went solo in 2023, up from 17% the year before.
2. Money Matters: Focus on Affordability
Affordability plays a huge role in the decision to buy a home. A staggering 53% of first-time buyers held off because of their finances, with 42% feeling like they weren’t financially ready. Many are also keeping a close eye on interest rates, with 32% waiting for them to drop before taking the plunge.
“The best time to buy is when it fits your budget,” says Boniakowski. “Focus on what you need and what you can afford.”
He also advises assessing your income and debts for a clear financial picture. “Factor in all your monthly expenses, like streaming subscriptions and coffee runs, and leave a little extra for unexpected costs. This way, you’ll have a realistic idea of what you can afford and what you need to save for.”
3. Stress Alert: Homebuying Comes with a Side of Stress
Buying a home can be a stressful journey. Opendoor’s findings reveal that a whopping 90% of first-time homebuyers find the process stressful. The pressure to act fast to secure a home is a big part of it, especially for younger buyers. Seventy percent of those under 40 felt the heat to buy quickly compared to 55% of those over 40.
And the stress doesn’t stop once you’ve got the keys. While 73% celebrated their new home, 27% were just relieved the whole thing was over. And a hefty 65% wondered if all the stress was worth it.
4. House-Hunting Fatigue: Burnout is Real
First-time buyers are clocking up the miles on their house-hunting expeditions. In 2023, they visited an average of 23 homes, but Gen Z seems to be the most indecisive, checking out an average of 32 homes—both virtually and in person. That’s 45% more than millennials and a whopping 60% more than Gen X.
However, parents are seeing fewer homes. Only 28% of first-time buyers with kids toured 20 or more homes compared to 44% of those without kids.
All these tours can lead to burnout, with buyers feeling overwhelmed by all the options and worried they might regret their decision.
5. Compromises Abound: Adjusting Expectations
The Concept of a "Dream Home" is changing, with many first-time buyers making compromises. Around 32% didn’t buy in their ideal location, 28% didn’t get all the features they wanted, and 22% settled for a smaller home.
Boniakowski suggests carefully considering these trade-offs. "The better prepared you are, the easier it will be to find the perfect one when you come across it.
In Conclusion,
In 2024, first-time homebuyers are embracing new strategies to realize their dreams. From collaborative purchasing to financial mindfulness, they're adapting to market challenges. Yet, amidst the stress and fatigue, simplifying the process remains crucial. By staying informed and resilient, buyers can confidently navigate this journey and find their ideal home in an evolving landscape.
