News & Blog

From REALTOR ® Magazine: First-Timers Shocked by How Much Home They Can Afford

Feb 23
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In a recent realtor.com® survey, more than two-thirds of 1,000 prospective and recent first-time home buyers say they are surprised at what they can afford. In fact, 47% state their budget is larger than they thought it would be.
George Ratiu, senior economist at realtor.com® states, “The dramatic decline of mortgage rates in 2020 was a pleasant surprise for many buyers…For first-time buyers, the drop in the 30-year mortgage rate from 3.65% in March 2020 to a record low of 2.65% in January has provided unexpected leverage. Lower rates allowed many buyers to stretch and buy more expensive homes while keeping their monthly budget the same.”
Despite these survey results, many first-time buyers acknowledge having to compromise on their recent purchase, and almost half of those who took the survey shared they had been outbid on homes they wanted to purchase. Additionally, according to the survey, s21% of respondents claimed they had to expand their search for a home to less expensive neighborhoods, 20% had to increase their budget for housing, and 18% had to eliminate some of their wish list items.
Another component of the survey revealed that first-time buyers are saving for their home faster than expected, with half of recent first-time buyers saying they were able to save for a home in less than three years by “putting aside a portion of their paycheck each month, cutting out discretionary spending, and saving lump-sum payments like tax refunds.”
A huge help for first-time buyers also came from family help; 52% of respondents report they received down payment assistance from friends or family, especially parents.
To read the original posted article on REALTOR® Magazine, click here.

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North Eastern Group Realty is Fort Wayne’s largest independent real estate company located at 10808 La Cabreah Lane, Fort Wayne, IN 46845.