First-time homebuyers are getting tired of losing bidding wars—and many are taking steps to become more competitive in this competitive housing market.
Instead of throwing in the towel, more hopeful homeowners who have been saving money during the pandemic are now willing to spend more on a home and offer more than the asking price, according to a recent Realtor.com® survey
Of the more than a quarter of would-be first-time buyers who haven’t closed on a home this year, nearly three-quarters said they plan to keep trying. More than 9 in 10 first-time buyers plan to offer more than 20% down, if possible, and buy a more expensive home than maybe they would have considered two years ago.
And yes, many are also willing to pay more to become homeowners.
The number of folks looking for homes in the $500,000 to $750,000 range more than doubled from 6% in the spring of 2021 to 13% in the fall. Fewer people in the same time period were seeking properties priced below $350,000, dropping from 75% of first-time buyers to 62%.
Despite rapidly rising prices, nearly a third of these buyers are now willing to offer 30% over the list price of a home—compared with none in the spring when Realtor.com conducted a similar survey. Offering that much can add more than $110,000 to the price of the typical home.
As the pandemic drags on, millennials are increasingly seeking out more flexible space that they can use for multiple purposes, as more people are now working from home and generally spending more time there.
However, nearly two years into the pandemic, they’re not as willing to relocate to get all of that extra space. About 47% planned to stay in their current towns and cities in the fall compared with 40% in the spring. Just 16% planned to move out of state.
Companies bringing workers back to the office, or planning to in the new year, could also deter some folks from uprooting. Plus, many farther-out and smaller cities became less affordable as the pandemic dragged on.