- TD polled buyers planning to purchase in 2022
- More than two-thirds are concerned about being able to
afford a home
- Less than half have created a budget
- Just 22% have spoken with a lender
CHERRY HILL, N.J., March 17, 2022 /PRNewswire/ -- First-time
homebuyers are feeling anxious and unprepared in this highly
competitive housing market, according to a new survey from TD Bank,
America's Most Convenient Bank®. TD's First-Time Homebuyer
Pulse found that despite a desire to make a purchase, nearly three
in 10 (29%) of Americans hoping to buy feel this is an uncertain
time to do so. Furthermore, buyers haven't taken steps to
prepare for the competitive housing market or reconciled their wish
lists, two things that are key to securing a home in this
If first-time homebuyers want to ease anxieties, it's imperative
that they meet with a lender early in the process.
TD Bank surveyed more than 1,000 Americans planning to buy
their first home in 2022 to uncover homebuyers' views on the
purchase process, their preparedness to enter the market, and what
they're looking for in a home.
First-time homebuyer jitters are strong
Low inventory, steep competition, and high prices in many areas
across the U.S. are fueling fears for buyers and creating an even
more daunting undertaking for those entering the market for the
first time. TD's survey found that only 36% of those looking to
purchase a home this year thought that now was a good time to buy,
a sharp decline from 59% in 2021 and a dramatic drop from two years
ago in 2020 when almost twice as many prospective buyers (68%)
thought it was a good time to purchase a home.
First-time buyers' perception of the economy and finances are
chief sources of worry. Seven out of 10 are concerned about the
economy, and 67% are concerned about their ability to afford a
home. With the median U.S. home price reaching $350,300 in January, a 15.4% increase from the
same time last year according to the National Association of
Realtors, it's not surprising that the majority (65%) of those
surveyed say home prices are too high. Despite dampened enthusiasm,
35% still want to purchase a home as quickly as possible while 30%
are willing to wait it out a bit. But is timing really the
"Whether you enter now or in a few months, you're going to be
faced with a competitive market," said Steve Kaminski, Head of U.S. Residential Lending
at TD Bank. "If first-time homebuyers want to ease anxieties and
succeed, it's imperative that they prepare and meet with a lender
early in the process. Lenders can help lay the financial foundation
and educate buyers on the paperwork they'll need for the mortgage
process, giving them confidence as well as a leg up on the
Financial fears don't prompt preparedness
Amid the glaring hurdles of the housing market, more than half
(54%) of respondents view the homebuying process as painful. But
that's not prompting first-time buyers to find ways to successfully
navigate the mortgage process, which would go far to strengthen
their purchase power and ease concerns. TD Bank found that less
than half of first-time homebuyers (48%) have started saving for a
down payment, compared to 59% last year. More than half (54%) have
not yet established a budget for their new home and those who have
may have failed to account for the total costs of home ownership,
from maintenance and renovations to Homeowners Association fees,
utilities and insurance.
Furthermore, only 22% have spoken with a lender, despite 33%
reporting they have already started touring homes (in person or
virtually) and 53% regularly browsing listings online.
"It's undoubtedly a seller's market, where they're often
entertaining multiple offers, so the most prepared buyers – those
who have their paperwork in order and can enter a contract with
ease – are most attractive to sellers," said Kaminski. "You have to
start conversations with your mortgage lender as soon as possible.
They can help first-time buyers find out how much they can afford,
what mortgage options exist and level-set before they begin
Increased education from lenders about first-time homebuyer
programs could also ease the burden for the 46% of respondents (and
51% of younger millennials ages 26-33) that said saving for a down
payment was a roadblock to purchasing their first home. In
addition, 81% of low- to moderate-income borrowers cite making a
down payment among the top three barriers they're concerned with
facing in the homebuying process.
"Buying a home is a huge financial commitment but it doesn't
mean it's off the table if you feel you have limited resources,"
said Kaminski. "Many lenders, including TD Bank, can introduce
buyers to affordable mortgage programs and products designed to
give first-time buyers more flexibility in the purchase process.
So, no one should count themselves out. Buyers should speak with a
professional and learn their options first."
Balancing wish lists with budget realities
Steep competition warrants a revised wish list in this market.
But, surprisingly, just a little more than half (52%) are looking
for a starter home or fixer-upper rather than a forever home. That
differs from last year, when 71% wanted either a starter home, a
fixer upper they'd eventually grow out of, or a fixer upper they
would turn into their forever home. This is a surprising finding,
as flexibility in home condition can be an integral factor in
securing a property in today's housing environment. More than half
(56%) of those looking for a starter home or fixer upper say the
current market impacted their decision, with 39% trying to find
something more affordable and 22% unable to find the forever home
they wanted due to low inventory.
Perhaps unsurprisingly, spending more time at home during the
pandemic has reshaped buyers' wish lists. Only 31% listed "close to
my office/work" as a top three priority for their new home, down
from 37% last year, representative of more permanent hybrid and
remote work. The pandemic has also driven buyers' desire for more
square footage, allowing more room for stay-at-home conveniences.
More living space is a motivator for most (69%) homebuyers, in line
with the same percentage from 2021. In particular, 45% of
respondents are factoring in space for a home office into their
search, and 37% are considering space for a home gym. And don't
forget about those pandemic puppies - 46% specifically want a home
with space for pets, which jumps to 54% among younger millennials
"It's important to identify your must-haves and your
nice-to-haves in a home," said Kaminski. "In this market, you're
likely going to have to make trade-offs, like purchasing a starter
home or opting for less square footage. Speaking with a lender
first helps you understand how much home you can afford so you can
balance your wish list with the realities of your budget and tailor
your home search accordingly."
Like any major financial decision, there's power in properly
preparing to buy a home. Here are a few quick tips to help
first-time homebuyers successfully enter the market and navigate
the mortgage process.
- Learn about home ownership: Understanding what you need
to know better positions you to work with realtors and lenders
during the process.
- Determine what you can afford: Establish a budget so you
know how much you can afford and what you're comfortable spending
before you begin your search.
- Find a lender: A lender can introduce you to affordable
loan options and first-time homebuyer programs that can help lower
interest rates and provide down payment assistance. They can also
provide a pre-qualification letter, which demonstrates to realtors
that you're serious about buying a home.
- Get your paperwork in order: Pay stubs and other
documents indicating income will be needed during the application
process. Accessing them early allows you to be nimbler when
applying for a mortgage, speeding up the process.
An online survey was conducted by CARAVAN® at ENGINE Insights
among a sample of 1,003 U.S. adults who plan to buy their first
home in 2022. The survey was live on January 21 – February 1,
2022. Low- to moderate-income homebuyers are defined as
respondents having household income within 50% to 80% of the median
family income for their state.
ENGINE is a global, full-service media and marketing
services company that empowers clients to outperform in the present
and win in the future with its vast range of marketing solutions
including insights, creative, media, data and
technology. Founded in 2005, ENGINE has global headquarters
in New York and 16 offices across North America, the UK,
Europe and Asia-Pacific. Find out more
at enginegroup.com and follow @engineworldwide.
About TD Bank, America's Most Convenient
TD Bank, America's Most Convenient Bank, is one of the 10
largest banks in the U.S., providing more than 9.5 million
customers with a full range of retail, small business and
commercial banking products and services at more than 1,220
convenient locations throughout the Northeast, Mid-Atlantic, Metro
D.C., the Carolinas and Florida.
In addition, TD Bank and its subsidiaries offer customized private
banking and wealth management services through TD Wealth®, and
vehicle financing and dealer commercial services through TD Auto
Finance. TD Bank is headquartered in Cherry Hill, N.J. To learn more,
visit www.td.com/us. Find TD Bank on Facebook
at www.facebook.com/TDBank and on Twitter
at www.twitter.com/TDBank_US and www.twitter.com/TDNews_US
TD Bank, America's Most Convenient Bank, is a member of TD Bank
Group and a subsidiary of The Toronto-Dominion Bank of Toronto, Canada, a top 10 financial services
company in North America. The
Toronto-Dominion Bank trades on the New
York and Toronto stock
exchanges under the ticker symbol "TD". To learn more, visit
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SOURCE TD Bank