Following A Year of Uncertainty, Chase Home Lending Study Finds First-Time Homebuyers May Lack Confidence – But Are Still Motivated to Buy
Research Indicates that Consumers’ Likeliness to Purchase a Home in 2021 Remains High Amid Income Fluctuations
NEW YORK, July 14, 2021—With the summer homebuying season well underway, today, Chase Home Lending released the findings of its new First-Time Homebuyer Study. The survey included more than 1,100 consumers who indicated that they are looking to purchase a home and are actively preparing to buy. Though the COVID-19 pandemic had a considerable impact, 60% of respondents said they were likely to purchase in the next 12 months, and 69% still see homeownership as an important part of building wealth.
Unsurprisingly, the majority of first-time homebuyers indicated that the COVID-19 pandemic changed their thoughts/plans on buying a home in 2020. Seventy percent of respondents said they were waiting to see how the housing market would play out last year. Change of income (61%) and re-evaluating how they would finance their home purchase (58%) also had a prominent effect on timelines and urgency to buy.
The study was commissioned to better understand the needs of first-time buyers looking for a home following the pandemic. Homebuying attitudes, behaviors and expectations were evaluated, placing an emphasis on how the events of the past year have impacted confidence, financial readiness and more.
“The events of the last year upended various aspects of our lives, including prospective homebuyers and their plans to purchase,” said Sean Grzebin, Head of Consumer Originations for Chase Home Lending. “Despite possible income changes and prolonged timelines, buying a home as a means to build wealth and stability still resonates with first-time homebuyers. The research shows that they are also open to making lifestyle changes in order to reach their homeownership goals.”
Consumers Take Action in 2021
Only one-in-four first-time homebuyers said they had strong confidence that they would be financially ready to purchase a home in the first half of 2021 – but this didn’t stop them from taking steps to set themselves up for success.
- 7 of 10 respondents made lifestyle changes in order to work toward homebuying success.
- 66% have already created monthly budgets and worked to improve their credit score
- More than half of respondents plan to research down payment assistance programs this year; 33% have already done so in 2021
- 77% of respondents said they are actively saving for a down payment
Confidence Higher Among Black and Latinx Respondents
The study also revealed that nearly three-quarters of Black and Latinx respondents agree that owning a home is an important step to building wealth, slightly above the overall average of 69%. Additionally:
- 48% of Black and Latinx respondents felt knowledgeable or comfortable with the homebuying process while the average for all respondents came in lower at 40%
- 65% of minority respondents expect the homebuying process to be enjoyable, which is higher than the overall average of 51%
- When it comes to desired features in a home, 51% of Black and Latinx respondents are looking for dedicated office space in their first home (vs. 45% total) and 42% want workout space (vs. 34% total)
The study is based on the responses of 1,100 U.S.-based consumers fielded between March 10 – 24, 2021 amongst those who have never owned a home. For more information about Chase Home Lending, visit www.chase.com/mortgage.
Chase is the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), a leading global financial services firm with assets of $3.2 trillion and operations worldwide. Chase serves nearly half of America’s households with a broad range of financial services, including personal banking, credit cards, mortgages, auto financing, investment advice, small business loans and payment processing. Customers can choose how and where they want to bank: More than 4,700 branches in 38 states and the District of Columbia, 16,000 ATMs, mobile, online and by phone. For more information, go to chase.com.
- The top three reasons respondents want to purchase a home are:
- Larger living spaces
- Space for family
- Financial independence
- Among those who were actively preparing in 2020, 41% say their confidence has decreased, mainly due to reduced income
- 37% of respondents said their budget decreased since the pandemic due to a decrease in income
- The top three financial actions taken toward homebuying are:
- Lifestyle adjustments
- Monthly budgets
- Improving credit scores
- 51% of respondents plan to research down payment assistance programs in 2021
- For about half of respondents, COVID-19 had some influence on the type of location they’re considering purchasing in
- Black and Latino respondents are more likely to purchase in an Urban location (30%) and prioritize the safety of the neighborhood (67%) than others surveyed
- 40% of respondents are either very likely or extremely likely to purchase a home in the next 12 months
- Black and Latino respondents (64%) were most impacted when it came to reconsidering how to finance a home purchase due to the pandemic
- Less than half (40%) of respondents feel knowledgeable and comfortable with the homebuying process
- Black and Latino respondents are the least likely (62%) to casually search for homes online, but the majority of this demographic expect the homebuying process to be enjoyable