How to Win the Hearts of First-Time Homebuyers

  • Categories:

    Industry Trends, Marketing Insights

  • Date:

    April 13, 2021

How to Win the Hearts of First-Time Homebuyers

Industry Trends Marketing Insights

The excitement of owning your first home is palpable — and part of a growing trend. In fact, first-time homebuyers accounted for 33% of home purchases in January 2021. Additionally, rookie buyers accounted for 43% of the new home market according to a February survey. As this group’s size and purchasing power continue to grow, it’s critical to understand what drives their purchasing decisions.

Location, Location, Location

Thanks largely to skyrocketing remote worker numbers, many urban dwellers are trading city life for the suburbs. With commuting no longer as big of a consideration for many, the appeal of more green space and more affordable housing has won out.

Size Matters

Most new buyers are looking for a home that is around 2,000 square feet. Furthermore, detached homes are the overwhelming favorite (as opposed to condos or townhomes). The overall average home size has been steadily shrinking since 2005, when it was around 2,700 square feet. This is because new homebuilders are focusing on entry-level houses, which are appealing to first-time homebuyers who may not want the responsibility of a larger home right away.

But here’s the catch: With more people staying at home during the COVID-19 pandemic, the desire for space — for coworking, remote learning and other activities — is growing. As a result, the immediate future may mark a reversal in the small home trend.

Flexibility Is Critical

Potential new homeowners are also more intentional than ever. They want quality materials in a home that is built to last — and function.

Gone are the days of single-use spaces such as dog washing stations or wine cellars. Instead, buyers want multiuse spaces. Like the mass exodus from cities, this shift may be at least partially due to a changing landscape in the wake of an unprecedented pandemic: With so many people working from home, what they want and need in a home has also changed. Consider that a single area may work quadruple-duty as a playroom, home office, homeschool space and lounge area.

Without question, flexible spaces will help buyers feel comfortable in a home’s ability to grow and change at the speed of life. Will they replace the open-concept designs that were so popular just recently? Only time will tell for certain, but it’s safe to expect at least a partial shift moving forward.

These Home Features Top the List

Top priorities for those shopping for a home include:

  • Energy Star windows

  • A walk-in pantry

  • A separate laundry room

  • Hardwood flooring in the main living spaces.

A whopping 62% said they would opt for a smaller house that had all of their wishlist items over a larger home with fewer features. Just don’t forget that people’s perceptions of the amount of space they need to live comfortably are changing with the times.

Let’s Get Outside

Outdoor spaces matter, too. The pandemic taught us the importance of a place to escape and enjoy nature. Room for a pool, playset or firepit (or all of these) is attractive to first-time homebuyers who are emerging from a tough year of social distancing and want to imagine an outdoor haven where they can show off their new home comfortably and safely.

The Competition’s On

First-time homebuyers are facing multiple obstacles — low inventory, high asking prices and tighter restrictions on borrowing, to name a few. And as a large wave of millennials reaches the average age of first-time home buying (31–32), the market is flooding with eager home seekers. This, combined with fewer people eager to sell because of the pandemic, has made for a very competitive market. New construction offers one appealing alternative, but the rising cost of building materials has fueled higher new home price tags across the board.

All of this means that first-time homebuyers are facing the ordinary fears and challenges of a major life milestone on top of a pandemic and housing boom. If you’re working directly with these customers, it’s important to understand the stress they’re facing while emphasizing the excitement of buying a home.

There is no denying the current massive audience that’s eager to buy, and many have the money to make it happen. Consider millennials in particular: Now the largest living adult generation, they’re building their families and looking to make the best of the post-pandemic climate. More than ever, they’ll gravitate toward brands and businesses committed to helping them settle down.

No matter the age or situation of a first-time buyer, it’s a momentous time for the whole industry. Keeping an eye on the challenges prospective new homeowners face, while sourcing inventory that meets their needs, is the key to winning their hearts and their business.

The future is now. Need help building your foundation for success? Email me.

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