Private mortgage insurer Essent recently published a study detailing the needs and preferences of younger first-time homebuyers. The study’s findings are based on an online survey Essent conducted earlier this year of 3,036 new and potential homeowners age 40 or younger. It addresses a variety of factors first-time purchasers consider, including the role of real estate agents, use of technology, the range of home options buyers are willing to consider, and their level of knowledge about home-buying requirements.
The study finds that first-time homebuyers rely heavily on technology and digital tools for navigating the home-buying and mortgage process. Essent concludes that first-time homebuyers communicate effectively with real estate agents through social media, and that they are more likely to work with companies offering online mortgage applications and procedures. In addition to online facilitation, first-time homebuyers also rely on their real estate agents for guidance throughout the entire home-buying process. The study recommends that real estate agents be prepared to develop both a business and personal relationship with young homebuyers.
The Essent study also shows that a significant percentage of first-time homebuyers are unaware of low down payment purchase options, noting more than half believe they need to provide at least a 10 percent down payment to buy a home. The majority of those surveyed plan to make their down payments with personal savings, meaning it will take some time for them to save up the funds they think necessary to purchase a home. Essent recommends that lenders and realtors provide young homebuyers more information about private mortgage insurance and down payment assistance options for first-time buyers.
The study advances four additional recommendations for real estate and mortgage professionals to better assist young first-time homebuyers: expand the use of digital tools to meet first-time homebuyers’ needs; leverage advance listing features to attract new buyers; use social media to reach first-time homebuyers; and understand the importance of both low interest rates and quality customer service to young consumers.