First-time homebuyers are having a hard time finding their dream home, delaying their journey to homeownership.
And they are making up a huge percentage of the market. According to realtor.com®, 42% of buyers in the spring were first-time buyers. Nearly a quarter of first-time buyers have been searching for more than a year, and 32% said they have been searching for more than six months. This is up significantly year-to-year, when only 18% had been looking for at least six months and 11% had been looking for a year.
The biggest obstacle? Finding a desirable home in the budget, said 42% of first-time buyers, followed by 41% who said they cannot find a house that meets their needs, up more than 10% year-to-year. Most first-time buyers (45%) are looking for homes in small towns or rural areas, while 34% are looking in the suburbs, with only 16% looking in a city. Forty-seven percent are hoping to remain in their current town, while 26% hope to move to a different community in the same metro area. The majority of first-time buyers are looking to remain in the same metro area. Most current first-time homebuyers are millennials, followed by Generation X members.
“Based on our user responses, just under half of all home shoppers this spring were searching for their first home, and many of them were aging millennials likely driven by life events such as moving in with a partner, getting married or starting a family. It may come as a surprise to some people that millennials are looking to small towns or suburbs, but when it comes to buying a home, millennials aren’t that different than other generations,” said Sabrina Speianu, senior economic research analyst at realtor.com®.