If any first-time home buyers were on the fence about taking a more traditional starter home path to homeownership in 2020, the Covid-19 pandemic brought into focus the way they viewed homes and what they really wanted for a dream home.
For Millennial home buyers, this past year’s change in the economy, employment and especially dropping interest rates offered surprises, with 47% being pleasantly surprised that they could afford a higher-priced home, according to a generational insights report by realtor.com. On the flip side, 21% were surprised that their budget was lower than they thought.
The dramatic trajectory of mortgage rates in 2020 was a significant positive contributor to housing finance.
“For first time buyers, especially, the decline in the 30-year fixed rate from 3.65% in mid-March when the pandemic hit to a record-low of 2.65% on January 7, 2021, has provided unexpected leverage,” reports realtor. com, adding: “Practically, for many buyers, lower rates allowed them to stretch their budgets and buy more expensive homes than they would have.”