But many who have done so in recent years are financially stretched
A larger share of Americans are planning to buy a home now compared to last year according to a new survey.
The Nerdwallet Home Buyer Report reveals that 36% plan to buy in the next five years, including 24% who plan to do so in the next 12 months; compared to 32% who said so in 2018.
As home price growth slows and interest rates remain low, Nerdwallet’s home expert Holden Lewis expects an uptick in those looking for homes including first-time buyers.
Competition means multiple offers
Despite some improvement, affordability remains a challenge and competition is expected to be high in many markets, requiring multiple offers to be made.
For respondents who have bought a home in the past 5 years, 45% offered more than the asking price before their offer was accepted and on average put in 3 offers before closing (3.8 for first-time buyers).
But the survey suggests some buyers may have overstretched their budgets – and perhaps overpaid for their home - with 25% of homeowners saying they no longer felt financially secure after buying their home (38% of first-time buyers).
Homebuyers making mortgage mistakes
The report also shows some common misconceptions about homebuying including the belief of 62% that a 20% down payment is required; that has risen from 44% who thought so in 2017.
There is also a lack of comparison between mortgage lenders with half of home buyers only looking at one lender before applying for their loan.
Nerdwallet’s analysis shows that comparing mortgage rates could save borrowers more than $400 each in the first year of a 30-year mortgage.