August 21, 2008 8:14 AM

First-time home buyers want more than they can afford

First-time home buyers are primarily concerned with affordability when choosing a new home, but their expectations may be too high relative to their current financial buying power, according to a recent Coldwell Banker® survey conducted among its brokers. While nearly half of the Coldwell Banker broker respondents reported that affordability was the No. 1 concern for this group, 81 percent said today's first-time home buyers consider move-in conditions to be very important when searching for homes.
In contrast, only 7 percent are looking to purchase "fixer-upper" homes that they could buy at a lower price and renovate themselves.
"In the past, first-time home buyers were willing to purchase older, more basic houses in an effort to save money and break into homeownership," said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate, LLC.
"Today, this group has greater home expectations because they have grown up more accustomed to their parents' lifestyles." he added." It is important for first-time homebuyers to remember that by considering a 'fixer-upper' for their first home purchase, they can build equity over time and move up and into their second-stage home that better reflects their expectations."
Survey findings also suggest that first-time home buyers worry more about credit ratings and approval than they did a decade ago, but less about down payments.
This may be because they have saved money themselves, or have received additional support from parents to help their first-time home purchase.
According to 29 percent of brokers surveyed, first-time home buyers were more concerned with down payments 10 years ago than anything else, while only 17 percent said this is the biggest concern in today's market.
Meanwhile, survey respondents said that only 4 percent of first-time home buyers were worried about their credit scores in 1998, while 14 percent said it is more of a concern today.
"Owning a home is a great investment that will provide tax breaks, financial gains - as well as considerable joy over the years," Gillespie said. "First-time home buyers now have higher standards, placing an increased focus on the financial aspects of home ownership and at the same time, want a larger home they can live in right away."
Additional key findings from the survey include:
· 71 percent of brokers noted that first-time home buyers are looking for larger homes than they were 10 years ago.
· According to 41 percent of the respondents, proximity to job is the No. 1 attribute first-time home buyers are looking for in a home.
Thirty five percent of the survey respondents said "investment" is the No. 1 reason first-time home buyers are making their purchase.
46 percent of the survey respondents reported that first-time home buyers look at five to 10 homes, on average, before making a purchase.

Posted by John Rebchook at 8:14 AM | Comments (2)