The majority of first-time homebuyers plan to skip the starter-home step and move straight into the home that would meet their long-term needs, according to the Homebuyer Insights Report from Bank of America.
The inaugural edition of the report found that 75% of first-time buyers would rather bypass the starter home to purchase larger properties. Thirty-five percent also said they plan to retire wherever they buy.
Age and debt could explain why many first-time buyers are eyeing larger homes. Forty-three percent of Gen Xers, defined roughly as those born between 1965 and 1980, have opted to hold off buying homes until they paid down debt. These buyers don't necessarily want to live in starter homes, D. Steve Boland, consumer lending executive for Bank of America, said in a press release Wednesday.
"Today's aspiring homebuyers want to be selective and believe they should wait until they can afford to buy a home they'll live in for years to come," he said.
Thirty-two percent of millennials said that they would wait to pay down debt before buying a home, but more than twice as many — 66% — said they would likely need assistance from their parents to buy their first home.
For experienced buyers, acquiring a home meant making trade-offs, with 75% saying they made sacrifices to afford the purchase. Nearly half said they sacrificed travel, while 37% skipped buying new car and 32% decided against adding new features to their homes.
To produce the report for Bank of America, the independent market research company Braun Research surveyed 1,001 people age 18 or older who wanted to buy a home in the future.