First-time buyers paid a median price of $510,000 for their home purchases in 2021 and 2022, roughly 13% more than repeat buyers paid, according to real estate data company Clever.
The premium coincides with first-timers accounting for 70% of all buyers in 2021 and 2022, per Clever. Paying above the asking price also was 11% more common among first-time buyers than repeat purchasers, with first-timers paying a median of $77,500 above the asking price, compared to $60,000 for repeat buyers.
In particular, first-time buyers had a hard time submitting attractive offers, Clever noted, since they were less likely to have funds on hand from the sale of a previous property or to be able to increase their downpayment. Subsequently, first-time buyers were 1.6 times more likely than repeat buyers to submit at least 10 offers before making a purchase. Conversely, while 25% of repeat buyers made only a single offer, just 17% of first-time buyers were able to do so.
First-time buyers also were more inclined to buy a house without seeing it in person. Forty percent submitted a sight-unseen offer, nearly twice as often as repeat buyers (25%). Many first-timers have been saddled with higher rents as the multifamily market bounced back last year, so they were not only more likely to take financial risks but were also more willing to make concessions to achieve their homeownership dreams.
New buyers, Clever reported, were 8% more likely to make at least one compromise on their home purchase. Not that repeat buyers were immune to doing so as 80% of all buyers compromised on their priorities, with price listed as the most common sacrifice. Forty-five percent of participants in Clever’s study listed finding an affordable home as one of their homebuying priorities, but 35% had to offer a higher price than they wanted to secure their home.
Finding a home with no necessary renovations was the No. 2 most-compromised priority, with 28% listing it as a priority and an equal share compromising it to buy their homes. Notably, Clever survey respondents actually rated finding a home in a good neighborhood as their biggest priority, with 50% of buyers indicating that it was on their list of concerns. Ultimately, 20% of buyers compromised on this aspect.
Buyers also compromised on specific home features, with about 24% purchasing an older home and 25% buying a home smaller than their desired square footage. At a median of 3,000 square feet, however, respondents still bought properties that were larger than the national median of 2,356 square feet.