Despite continued burdens created by inflation and mortgage rates that are still on the high side, many first-time homebuyers are more confident about their financial health and their ability to acquire residential property.
According to TD Bank’s (NYSE: TD) newly published First-Time Homebuyer Pulse survey of 1,007 adults planning to purchase their first home, 54% of respondents said they are better off financially today than they were two years ago and 39% believed this is a good time to buy.
Nearly half of the survey’s respondents were already preparing for their future purchase, with 48% stating they began to save for a down payment, 43% stating they have started monitoring their credit report or have taken steps to improve their credit score, and 48% stating they have established a homeownership budget for their first-time home purchase this year.
This is not to say the survey respondents were unconcerned about the wider state of things – 69% admitted being agitated about the U.S. economy and 64% acknowledged concern about their ability to afford a home with rising interest rates. Still, 85% of respondents affirmed that buying a home was a good long-term investment.
But not everyone is optimistic – nearly two in five (38%) renters said they considered delaying their home purchase and continuing to rent in 2023. Among this group, 30% said the top reason for this delay was an inability to afford the home they want due to rising interest rates. Yet on the flip side, 40% cited rising rent prices as the top reason to buy a home.
“Even as rates have risen in comparison to the historically low-interest rate environment many experienced in the past two years, buyers see the importance of building equity in a home purchase,” said Steve Kaminski, head of U.S. residential lending at TD Bank. “Homeownership has and continues to be a sustainable way to build intergenerational wealth, while providing the added benefit of shoring up a buyers’ financial position over the long-term.”
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