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By Kerry Smith<\/div><\/div>\n

Study: 47% of first-time buyers found that their budget allowed them to afford a larger house than they thought they could afford \u2013 but 21% had to lower expectations.<\/span><\/span><\/p>\n<\/div>\n

SANTA CLARA, Calif.\u00a0 \u2013 For first-time homebuyers looking to buy in 2021, a new survey conducted by HarrisX<\/a> on behalf of realtor.com indicates a critical starting point for first-time buyers is getting their finances in order. Almost half (47%) of 2020 first-time buyers say they turned to their finances before they did anything else.<\/span><\/span><\/p>\n

More than two out of three (68%) of the first-time buyers who checked their finances said they were surprised at the amount of house they could afford \u2013 47% were surprised because their budget was larger than they thought, and 21% were surprised because it was less.<\/span><\/span><\/p>\n

\u201cThe dramatic decline of mortgage rates in 2020 was a pleasant surprise for many buyers,\u201d says realtor.com Senior Economist George Ratiu. \u201cFor first-time buyers, especially, 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.\u201d<\/span><\/span><\/p>\n

To get what they wanted in their first home, many recent buyers had to compromise: 21% expanded their search into less expensive neighborhoods, 20% had to increase their budget, and 18% eliminated some wish-list features \u2013 namely a garage, large backyard, finished basement or pool \u2013 to stay in budget.<\/span><\/span><\/p>\n

Even with shortened wish lists or expanded budgets, nearly half (49%) of recent first-time homebuyers and more than a third (39%) of prospective first-time homebuyers said they fell in love with a home last year \u2013 but they were outbid or later learned they couldn\u2019t afford it. For many, it happened more than once: 20% were outbid on at least one home, and 20% made five or more offers before finally succeeding.<\/span><\/span><\/p>\n

\u201cYou have to know what you can afford before you head too far down the homebuying road,\u201d says realtor.com Home and Lifestyle Expert Lexie Holbert. \u201cPutting pen to paper and getting a real sense of your current monthly expenses and what you\u2019re saving each month is a good place to start when thinking about your mortgage. Especially as a first timer, it\u2019s really important to stick to your budget when searching online so you don\u2019t fall in love with something you can\u2019t afford.\u201d<\/span><\/span><\/p>\n

For the 44% of Americans who plan to buy but don\u2019t think they have enough saved for a down payment, their first home might be closer than they think. Half of recent first-time home buyers were able to save for a home in less than three years, mostly by setting aside a portion of their paycheck each month (50%), cutting out discretionary spending (33%), and saving lump sum money like tax refunds (32%).<\/span><\/span><\/p>\n

Plus, help from family could get them there: 52% of Americans who bought their first home in 2020 said they got help with their down payment from friends or family. The number one lender? Their parents.<\/span><\/span><\/p>\n

\u00a9 2021 Florida Realtors\u00ae<\/span><\/span><\/p>\n<\/div><\/div>\n

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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"