According to a recent study by Realtor.com, first-time homebuyers are tiring of bidding wars and ready to pay more to become homeowners. Survey results showed that 75% of first-time homebuyers who haven’t been able to close on a home in the past year plan to continue trying and more than 90% plan to offer more than 20% down when possible. Additionally, the number of buyers looking for homes between $500,000 and $750,000 increased from 6% to 13% from the spring to fall of 2021 and the number of buyers looking below $350,000 decreased from 75% to 62%.
Further elaborating, George Ratiu, manager of economic research at Realtor.com, said that “First-time homebuyers internalized how competitive the real estate market has been this year and have been willing to adjust their budgets, strategies, and expectations. Low mortgage interest rates have allowed first-time homebuyers to stretch their budgets. And many first-time homebuyers who have been able to work remotely have been able to save a little more for a down payment.”
As the housing market has remained competitive, many buyers have lost bidding war after bidding war and, despite the steadily increasing home prices nationwide, are willing to pay over asking price to win. Almost 30% of buyers surveyed responded that they are willing to offer 30% over the list price of a home, compared with none when a similar survey was conducted in the spring.
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