The housing market continues to warmly welcome first-time buyers with bidding wars, record-high home prices, and a shortage of inventory. According to a recent Realtor.com survey, a third of prospective buyers and just under half of first-time buyers were outbid on a dream home or discovered they could not afford it. Realtor.com surveyed 1,000 new buyers during the second week of January. Mortgage rates did help to boost some morale amongst first-time buyers. Roughly 47% of first-time buyers discovered their budgets were larger than they thought due to low rates.
That's largely due to mortgage rates, which averaged just 2.73% for a 30-year fixed-rate loan in the week ending Jan. 28, according to Freddie Mac. However, 21% learned their money wouldn't stretch as far as they had hoped.
Even those in a better financial position still had to compromise on what they wanted in a home—and where it's located. About a fifth were forced to look in cheaper neighborhoods. Another fifth had to spend more than they had originally planned, and nearly the same number had to forgo some of the home features on their wish lists. These included things like a garage, a big backyard, a finished basement, and a pool.
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