Buying a home can be a test of willpower, especially if a bidding war breaks out. Typically, it comes down to two options-spend more than the determined budget on that dream home, or make concessions and stick to inventory that is affordable. Some homebuyers choose to go for broke, others are willing to sacrifice amenities to avoid getting stretched too thin, and reaching either conclusion can be a harrowing ride. Speaking about the last year when mortgage rates were low and the market was competitive, NerdWallet’s home expert Holden Lewis described it as, “Homebuyers have been on a dizzying, twisty journey.”
The company’s 2019 Home Buyer Report took data that showed how much American homebuyers compromised to make their homeownership dreams come true, and where they could have saved some money. It showed that nearly half (45 percent) of Americans who’ve purchased a home in the past five years ended up offering more than asking the price before having their offer accepted. That explains the 25 percent of American homeowners that said they no longer felt financially secure after purchasing their current home, and more than one-third of first-time home buyers could identify with them.
By comparing mortgage rates among lenders, home buyers could save $776 million in a single year, that’s over $400 per borrower in the first year of a 30-year mortgage. Thirty-six percent of Americans plan to buy a home in the next five years, of which 24 percent will be in the next year. The study also looked at how those getting back on track from foreclosure feel about the possibility of future ownership. Thirteen percent of Americans have lost a home to foreclosure in the past 10 years—61 percent of those have not bought a home since, and 20% of those who haven’t repurchased say they never plan to again.
Quoting CoreLogic, the report pointed out that foreclosures peaked in 2011 during the crisis. More than 1 in 10 Americans (13 percent) say they’ve lost a home in the past 10 years due to a financial event such as foreclosure, short sale or bankruptcy. More than 6 in 10 (61percent) of them have not purchased a home since their financial event. Twenty percent of those who haven’t repurchased say they plan on never buying a home again. On the other hand, 58 percent say they plan to buy again in the next five years.
Read the full report here.