Buying a home is typically the largest purchase one makes in their lifetime and new data from Bank of America shows that the locations and feelings of family are a huge factor for first-time buyers looking to get into the market.
According to Bank of America’s 2021 Homebuyer Insight report—which puts first-generation homeowners in the spotlight—found that families play a key role in homeownership by helping with finances or offering advice, and that 43% of surveyed respondents purchased a home because their parents expected it of them.
"For many first-generation homeowners and their families, homeownership has a unique importance, given the collective efforts to overcome financial challenges that can often span generations," said AJ Barkley, Head of Neighborhood and Community Lending at Bank of America. "Achieving this goal can create a sense of pride and accomplishment that resonates both for the buyer and those closest to them, including their parents and future generations."
The survey found that the parents of first-generation homeowners instilled more than the benefits of homeownership into them at an early age as well—75% of respondents said they were taught about healthy financial practices and the benefits of good credit while 37% of respondents said their parents financially helped them with their first purchase.
Over the course of last year, 69% respondents said that owning a home has become more important to them compared to previous years as the concepts of building equity (61%) and having a safe place (73%) come into play.
Prospective buyers also said that high rent costs make it hard to save for a down payment while near-record high housing prices make it difficult to get into the market. Even though they are making owning a home a financial priority, 89% say there is more they can do to save additional money for a down payment.
According to Barkley however, the path to homeownership begins long before searching for a home.
"The journey toward homeownership—whatever your timeline—actually begins with your first banking experience and continues as you learn to budget, save and establish a solid credit history," said Barkley. "Building financial confidence takes time and requires making early, consistent and informed decisions that set you up for success.”
"While homeownership may feel like a distant dream, knowing the stepping stones and solidly planting one foot in front of the next can put you closer to your goal.”
To help first-time buyers, Bank of America has a program called the “Bank of America Community Homeownership Commitment” which helps “low- and moderate-income homebuyers across the country begin to build their personal wealth and family legacy through the power of homeownership” and has received $15 billion in funding through the year 2025.
The program offers two types of grants which do not require repayment:
The Down Payment Grant program helps buyers overcome the biggest barrier to homeownership—the down payment. In more than 260 cities and counties across the country eligible buyers can receive 3% of the home's purchase price up to $10,000, whichever is less, to be used toward their down payment.
The America's Home Grant program offers a lender credit of up to $7,500 which eligible buyers can use towards non-recurring closing costs, like title insurance and recording fees, or to permanently buy down the interest rate.
Bank of America gleaned the data for the survey from 2,363 adults who are first-generation homebuyers who either own a home or plan to purchase a home in the future. A full copy of the Homebuyer Insight Report can be found here.