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BUYING A HOME IN 2021

BUYING A HOME IN 2021: More Offers, More Denials, and Fewer First-Time Buyers

Despite low interest rates and a growing desire among renters to buy their next home, a mid-year survey reveals that purchasing a home this year has only grown more difficult. The results from the 2021 Zillow Consumer Housing Trends Report (CHTR) suggest the limited homes for sale and competitive market is forcing more first-time homebuyers to the sidelines.

According to the CHTR results, not only are fewer first-time buyers shopping but the downward trend of first-time buyers has accelerated. In 2020 first-time homebuyers made up 43% for the market, but in 2021 that number dropped sharply to 37% of buyers that were first-timers.

The share of homebuyers that are forced to submit multiple offers before finding their home is growing as well. According to the survey results, 59% of buyers reported making two or more offers. That’s up significantly from 42% of buyers making two or more offers in 2020.

With the competitive market, more buyers (28%) reported that they purchased a home higher than their initial budget in 2021. Consistent with a challenging market where buyers are more likely to go over budget, the share of buyers that faced at least one mortgage denial before getting approved grew from 22% in 2020 to 34% in 2021.

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