New Study by Shane Co. Breaks Down Statistics About First-Time Home Buyers
if you're interested in the housing market or looking to buy a home, this is. a must-read!
With the housing market absolutely sky-rocketing, and so many people looking into purchasing their first homes, we wanted to share an interesting new study that breaks down statistics about first-time home buyers in the U.S.! Shane Co. surveyed over 1,000 homeowners in early December 2021 to find out more about their first-time home-buying process, decisions, and outcome. The research uncovered some very interesting trends and opinions, and we’re going to break it all down for you in this article.
The First Home
When it comes to what type of home first-time buyers are investing in, what major renovations are planned, and how first-time homes meet expectations, the statistics might differ from what you’d expect! The most common style of home that first-time homebuyers are investing in most is a single-family (detached) home - about 42.2% of respondents answered single-family detached home, while townhouses or terrace homes came in second at 21.9%.
Making major renovations and DIY projects may seem like something Baby Boomers and Gen X would be privy to, but research shows that it’s actually more Gen Z and Millennials who will opt for major renovations in their new space. 58.3% of Gen Z first-time homebuyers plan to make major renovations to their home, while only 36% of Baby Boomers plan to do major demo. Perhaps Baby Boomers have more in their budgets when buying a home, and purchase homes needing fewer major renovations.
The study shows that 55.3% of homebuyers were within the ages 25 to 40 years old. Within this Millennial age group, those planning to do major renovations and leave the home as-is are almost evenly split in half. One thing that homebuyers across all ages mostly agreed upon, was the fact that they were purchasing their first home with the intention of upgrading to a different home later. 74.5% of homeowners believe in this “starter home” mentality and plan to upgrade in a few years or when their budget allows. With the housing market where it is right now, this mentality makes so much sense.
Luckily close to 90% of homes met expectations with respect to size, and location, while about 80% met expectations in terms of features. Hearing that most homeowners were able to find mostly what they were looking for is very reassuring, in fact, overall 85.6% of homeowners surveyed were “satisfied” or even “very satisfied” with their first home purchase.
Funding Your First Home
How first-time homeowners funded their home-purchase and how many were willing to go over budget really refelects the competitive nature of the current housing market. Looking at each generation, it was interesting to see that Baby Boomers stayed within their set budgets the most, while Gen Z was most likely to go over. Less than 5% of Baby Boomers went over their budgets, while 27.9% of Gen Z buyers did. This could come down to the theory mentioned before - Baby Boomers might have larger initial budgets, therefore, will find homes within that budget more easily, whereas younger generations with less wealth saved up might have to push their budget boundaries a little bit. For those that did go over budget, 22.2% spent over $10,000 more than they originally planned - this statistic once again reflects the competitive nature of the market right now.
It is very interesting to learn that 21.4% of homebuyers actually financed 100% of the home buying themselves! This is an encouraging number, considering so many people rely on loans or help from their families to purchase their first homes. 43.7% of buyers paid out of pocket, while a quarter of people had help from their family or friends, and about 7.6% had help from government assistance programs. If you’re planning on buying a home and need some help financially, don’t fret - you’re not the only one and this is totally normal!
When it comes to buying your first home, the process can be daunting and unknown. So where are most first-time homebuyers getting information about the home buying process? This study shows that parents, friends, and family who have bought, along with the internet and real estate agents are the most popular sources of information for new home buyers. A smaller percentage of respondents also got information from banks or mortgage brokers.
While you’d think that budgets would cause the biggest issues for those searching for first-time homes, it actually is the process of finding the right home that 40.5% of people said was their biggest issue. Only 15% of respondents said that spending over their budget was their biggest problem, and similarly, 14.3% said the biggest issue was dealing with delays caused by others in the home buying process. If you’re in the market to buy, be prepared for a longer and possibly more difficult search than you might have been expecting!
Living With Your Partner
Many first-time homebuyers happen to be couples investing in their first home together. Buying a house with your partner can sometimes raise issues, but luckily this study confirms that it’s generally good for a relationship and bonding. When it comes to living with your partner and buying a home together, it’s still important to make sure each partner has their own space in the home to retreat or spend alone time. In fact, 65% said they had their own spaces in their new home to “retreat” to, and 72.5% said having this personal space positively impacts their relationship. 17.7% of homeowners actually don’t even always sleep in the same room! Buying a home can mean more space for you and your partner, and this actually has a very beneficial effect on relationships.
Luckily, 89.1% of homeowners generally agree with their partners on home maintenance needs. Broken down by generation, Gen Zers are actually most likely to compromise on something to appease their partner, while Baby Boomers were least likely to compromise. 19-25.5% of Gen Zers, Millennials, and Gen Xers were willing to compromise, while this percentage drops down to 14.6% for Baby Boomers.
Messiness and demanding chores are the biggest areas of “annoyance” for partners owning homes together, followed by spending habits, and being overly dependent. Never cooking or doing the dishes are also on the list of annoyances but fall to the bottom. On the bright side, 85.5% of homeowners are either “satisfied” or “very satisfied” with living with their partner.
There are so many things to think about when buying your first home, and this study helps show that you are not alone! So many others are in the same boat when it comes to struggles finding a home, staying within budget, or agreeing with your partner about home renovations, and more. There are some very optimistic findings in this study, like how 85.5% of homebuyers were “satisfied” or “very satisfied” with their first homes, and 85.5% of homeowners are either “satisfied” or “very satisfied” with living with their partner. Thank you to Shane Co. for conducting and sharing this insightful study!
We Want to Hear From You
Are you in the market to buy a home? Was this survey helpful for you?