A TD Bank survey finds first-time homebuyers are optimistic about becoming homeowners, saying it’s a good time to buy—despite volatile mortgage rates and low inventory.
TD’s First-Time Homebuyer Pulse found that over half (54%) of survey respondents say they’re doing better financially today than they were two years ago, thanks in part to cooling inflation.
Consumer perception of the economy and housing affordability may not be glowing right now, but rising rents are driving more of them toward homeownership.
It makes sense. The more your income goes down the drain for a home that makes you poorer instead of wealthier, month after month… the more likely you are to think, “How much (more) would I have to pay to actually own a home—even if it doesn’t tick all the boxes?”
TD Bank surveyed 1,007 U.S. consumers planning to purchase their first home in 2023 to learn more about their path to homeownership, as well as their thoughts on how prepared they are for the home-buying process amid fluctuating mortgage rates and home prices.
First-Time Home Buyers Remain Optimistic
Even as housing prices fluctuate across the U.S., first-time homebuyers in TD Bank’s survey are optimistic about becoming homeowners, with 39% believing now is a good time to buy.
Many of those who’ve begun the home-buying process are taking steps to prepare, with 48% starting to save money for a down payment. And 85% of survey respondents believe buying a home is a good long-term investment.
Amid the optimism, first-time homebuyers do have reservations, with 69% worried about the economy and 64% uncertain about their ability to afford a home with rising mortgage rates.
Six in ten respondents are concerned about their ability to afford a home combined with their other monthly expenses. After all, aside from the likelihood of monthly housing costs surpassing their current rent payments, they also have to consider the strong possibility that their energy bill will increase, especially if their home costs more to heat or cool, and they’re using more water on a daily basis.
Also, buyers of older homes—or homes built in a hurry—may be faced with the costs of needed repairs, which they (and not their landlord) will be responsible for. And while first-time buyers still see the long-term benefits of buying a home, they may need more time to financially prepare for it.
Although typically overlooked when beginning the search for a home, meeting with a lender can help first-time buyers better understand the additional costs and opportunities associated with homeownership. Against the backdrop of higher rates, continued inflation, and low housing inventory, it is especially important for consumers to speak with mortgage professionals and realtors early in the process to create a well-adjusted budget and identify a comfortable price range for their home buying search, better positioning them to compete and make an offer on the home that meets their unique goals.
Steve Kaminski - Head of U.S. Residential Lending at TD Bank
Posted by:
Apr 12, 2023
