Of non-homeowners polled, an overwhelming majority felt that the reason they won't buy real estate in the next year is because it's too expensive. Even in the current real estate market with homes being less than half their value from only three years ago in some places, buyers still think homes are too expensive. Experts think that buyers (especially first time buyers) don't have an affordability problem as much as an "unrealistic standards" problem.
Most first time home buyers want a new home with multiple bedrooms in a good neighborhood. First time home buyers often fail to realize that their first home purchase should be a step to build on for a future real estate purchase. Many non-homeowners are spending equal amounts of money on rent that they would on a mediocre property. Looking for smaller homes and fixer-uppers is the best idea for a first time homebuyer. Finding a home with a low enough price that can be paid off in ten to twenty years is better than buying a home that is so expensive, it will take thirty years to pay off if the buyer can even afford the mortgage payments.
Recent surveys also show that a first time homebuyer's propensity for buying unaffordable homes may come from impulsiveness. The survey said that first time homebuyers usually look at five to ten homes before making a decision to purchase. Learned buyers usually look at fifteen to twenty homes before making a decision. The excitement built around buying a first home seems to cloud the judgment of first time homebuyers forcing them into tight situations.
A recent trend with home buyers is that they are seeking larger homes; the problem with this is that larger homes come with a larger price tag. The modern consumer needs to adapt to the market, larger homes are not affordable to first time buyers and they need to make due with smaller properties.