First-time buyers underestimate cost of homeownership

In closing, credit, FHA, First-Time Buyer, florida, Home Buyer, HomePath, HUD, miami, miami beach, Military, mortgage, real estate, tax credit on April 15, 2010 at 6:45 pm

First-time homebuyers change lifestyle to afford ownership

BIRMINGHAM, Ala. – April 15, 2010 – Prior to purchase, a vast majority of first-time homebuyers (88 percent) believe that they have accounted for all expenses related to owning a home.

Seemingly contradicting that notion, among those who had purchased a home in the past 12 months, just over half indicate that the expenses were more than they had calculated, causing a change in lifestyle.

The information comes from the BBVA Compass First Time Home Buyers Online Survey, which polled American consumers about the thoughts, emotions and hurdles related to owning and enjoying a first home.

Key first-time homebuyer findings include:

• Nearly one third have anxiety over the affordability of owning a home.

• 7 in 10 indicate that the first-time homebuyer’s tax credit has not truly factored into the timing of when they decide to purchase a home.

• 92 percent of respondents indicate that having additional time before their first payment due date would be helpful.

Regarding first-time homebuyers who have purchased a home in the previous 12 months, key findings included:

• 51 percent indicated that the monthly expense of owning a home was more than they calculated.

• Although 7 in 10 respondents said that the unexpected expenditures leveled out over time, another 87 percent said that they changed their lifestyle as a result of the additional expenses.

• Nearly one third indicated that they paid for these unexpected expenditures with a mixture of cash and credit, perhaps indicating a lack of liquid funds.

Both segments of first-time homebuyers were also overwhelmingly in favor of mortgages that allow breathing room between closing and the due date of the first payment. With this financial cushion, the First Time Home Buyer indicated that they would be in a better position to pay off credit cards and other bills, as well as make some of those unexpected purchases (household items and improvements) that come along with owning a home.

Research firm Qualtrics conducted the online survey of 300 first-time homebuyers between Feb. 21, 2010 and Feb. 25, 2010.

Repringed by permission: © 2010 Florida Realtors®


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