First-Time Buyers are Picky

(June 27, 2006) -- High expectations might be playing a role in the slowing U.S. real estate market.

A national survey by Wells Fargo Home Mortgage shows many first-time home buyers are unwilling to compromise on certain key elements in the homes they buy and that could prolong the time they spend renting.

Among the renters surveyed who say they want to buy a home, four of every 10 are unwilling to buy a home that is smaller than they'd like or one needing significant improvements. Forty-six percent are unwilling to buy at a distance farther from work than they would like; and 70 percent are unwilling to move to a less-desirable neighborhood than they would ideally like.

Other key findings from the survey include:

97 percent of first-time home buyers would never go back to renting.
77 percent of first-time buyers believe buying their home is the best investment they ever made.
Nearly 75 percent of first-time buyers believe that the value of their home will go up in 2006.
78 percent of renters believe that it is generally true that people cannot obtain mortgages without perfect credit, and 52 percent of renters believe that they personally can't get a mortgage because of credit issues. But 46 percent of the first-time buyers surveyed didn't believe their credit was "excellent" or even "very good."
56 percent of renters believe that a downpayment of 15 percent or more is required when buying a home, and 55 percent believe that size of a downpayment is a personal barrier for them. But 74 percent of first-time buyers reported they put less than 15 percent down.