Opendoor: A portrait of first-time homebuyers in 2023 MABA MassachusettsRealEstate MaBuyerAgent FirstTimeHomeBuyers

Many buyers entered the housing market for the first time in 2023. But who were these first-timers, and what did their homebuying experience look like? Opendoor recently released the third edition of its First-Time Homebuyer Report, which outlines demographics, trends and driving factors among people who purchased their first home in 2023. Forty-four percent of first-time buyers entered the housing market because of their desire to find stability and peace of mind from owning a home rather than renting.

Meanwhile, forty three percent did so for more space, while forty one percent saw the purchase as an investment opportunity, and twenty one percent did so because they were starting a family. Finances were a major factor in first-time home purchases last year. Fifty-three percent of buyers delayed buying a home because of financial constraints, including thirty two percent who were waiting for interest rates to fall. Other reasons for putting off home purchases included relationships nearly one in four buyers held off because of family reasons, while eighteen percent waited because of their romantic relationship status.

Financial constraints also led many first-time buyers to adjust their expectations when it came to their homes. Thirty-two percent didn’t buy in the area they originally wanted to, while twenty eight percent didn’t get all the features they were hoping for, and twenty two percent bought a smaller home than they had originally planned on. Of buyers who made compromises, thirty nine percent did so because buying a home was more important than finding a place that checked every box on their list, while thirty five percent couldn’t find a home with everything they wanted, and thirty percent couldn’t afford a home with everything they wanted.

Another notable find from the study was that despite a thirty five percent increase in solo first-time buyers, the trend of “co-buying,” or buying a home with a friend, significant other, coworker or family member, was on the rise last year. More than one in ten first-time buyers participated in co-buying in 2023, the vast majority of them being men, at sixty two percent. Co-buying with a platonic partner isn’t all sunshine and roses, though: nearly half of all co-buyers who purchased with friends said they argued about which home to buy during the purchase process.

Most co-buyers purchased a home with a spouse or partner, with sixty one percent of all first-time buyers last year embarking on homeownership with their significant other. Solo buyers made up the next highest percentage of first-timers at twenty three percent, followed by those who purchased with parents at sixteen percent, those who purchased with friends at eleven percent and those who purchased with siblings at seven percent. Many first-timers felt pressure to purchase their home ninety percent of respondents reported feeling pressure to move quickly so they wouldn’t miss an opportunity. Over forty percent said that pressure was self-imposed, although nearly a quarter reported feeling pressure from their agent or from their co-buyer.

Buyer’s remorse remained a factor in 2023. Nearly one-third of first-time buyers held on to the belief that they could have found a better home if they’d just kept looking. Despite that, the average buyer viewed over twenty three homes, either virtually or in-person. Gen Z buyers viewed the most properties at thirty two, followed by Millennials at twenty two and Gen X at twenty. However, seventy five percent of first-time buyers said they ultimately celebrated when their transaction closed although twenty seven percent were just relieved the process was over.

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FIRST TIME HOMEBUYERS