What Today’s Homebuyers Want: Preferences, Deal Breakers, and Budget Insights

Buying a home in 2024 hasn’t been easy for the majority of those going through the process. The word “challenging” doesn’t even begin to describe it.

Buyers don’t just have mortgage rates and high home prices to contend with. Many first-time home buyers, in particular, run into unexpected costs and hurdles that made buying a home far more expensive—and more stressful—than they thought it would be.

This is where you come in. Buyers who know what to expect and how to deal with it have a much smoother path to homeownership.

Two new articles highlight buyer experiences when it comes to home shopping and the compromises they’ve made to buy a home.

Those highlights come from a Homes.com and Apartment Therapy survey of more than 600 readers who either recently bought a home or are currently shopping for one.

Read on for the highlights.

Budgets, Home Types, and Buyer Preferences

Apartment Therapy, in partnership with Homes.com, asked 676 of its readers—specifically those who bought a home in the past 18 months or who are still in the market for one—about their real-life experiences as homebuyers, with special attention to:

• How much they needed for a down payment
• Their top preferences and deal breakers
• What they would and would not compromise to buy a home

Among prospective buyers with budgets under $500K:

• One in five (20%) are looking at condos/apartments
• 15% are looking at townhomes
• 7% are considering tiny homes

The top must-haves for today’s prospective buyers include:

• Washer/dryer hookups (77%)
• Garage/parking space (59%)

Down Payments, Closing Costs, and Saving Strategies

Recent homebuyers spent an average of 5 years saving for their down payment, while prospective buyers have been saving for 4.63 years, on average.

Also, 83% of prospective buyers are using savings accounts, with 31% opening high-yield savings accounts specifically for costs related to a home purchase.

Those costs go well beyond the down payment, which is daunting enough for many.

Recent homebuyers made down payments of 17.38%, on average, with nearly half (49%) putting down 10% or less. More than three-quarters (28%) put down 5% or less, despite knowing they would have to pay mortgage insurance.

According to Zillow’s Buyer Trends report, the median mortgage buyer put down 20% of their home’s purchase price.

Down Payment Percentages in 2024:

• Less than 3% down (7% of buyers)
• 3% to 5% (11%)
• 6% to 9% (8%)
• 10% to 19% (22%)
• 20% (28%)
• Between 21% and 99% (24%)
• NET: Less than 20% (48%)
• NET: 20% or more (52%)

This year, 75% of mortgage buyers saved up at least part of their down payment over time—higher than the 70% peak reached in 2018.

Sources Mortgage Buyers Used to Finance Their Down Payment:

• Saved it up over time (62%)
• The sale of my previous home (43%)
• Gift(s) from family and/or friends (26%)
• Loan(s) from family and/or friends (26%)
• My retirement fund (20%)
• Sold stocks or other investments (24%)
• Other (21%)
• NET: Gift/loan from family/friends (30%)
• Two or more sources (54%)

Savings account for the largest portion (41%) of the average down payment—roughly $30,000 on the typical market-rate home, assuming a 20% down payment. For mortgage buyers who also sell their previous home, though, proceeds from that sale pull ahead, accounting for 42% of the down payment versus 27% covered by savings.

About one in five mortgage borrowers (20%) tap their retirement funds to cover at least part of their down payment. But the average U.S. down payment is just 6% retirement savings—roughly $4,000.

Gifts or loans from family and friends likewise represent a small portion of the average down payment. While about one-third (30%) of buyers report using this type of financial assistance, it accounts for only 30% or about $9,000 of the average down payment.

Some good news for first-time buyers: Zillow reports those who finance their first home purchase with a mortgage are more likely to report receiving down payment assistance (60%) compared to repeat homebuyers (43%).

Read the full report on Zillow for more information, including charts and methodology.

Home Shopping Is a Marathon

The second Apartment Therapy article offers a reality check for prospective homebuyers, based on what recent buyers have experienced while house hunting and buying a home.

It hasn’t been easy—let alone quick. Recent buyers spent 7.5 months, on average, looking for their home. And prospective buyers have been searching for an average of 8.5 months.

All the more reason to tell them about the opportunities for buyers this fall.

On average, homebuyers made two offers and toured 11 homes before buying their current home. Nearly six in ten (59%) prospective buyers check online listings more than once a day.

Home buyers rated saved search areas and new listings alerts as the most helpful online search tools.

Unexpected Hurdles and Hidden Costs

The biggest challenges faced by homebuyers in the survey include:

• High home prices (64%)
• High interest rates (55%)
• Difficulty finding a suitable home (39%)

Eight in ten experts (80%) report buyers are least informed about home buying costs other than the down payment. And nearly one-third (31%) felt under-informed about those costs.

That’s a big deal when you consider closing costs are typically between 2% and 3% of the mortgage loan, which translates to between $8,246 and $20,615 for a median-priced home ($412,300).

According to two-thirds of housing experts surveyed (67%), many buyers are also unaware of what to expect when it comes to real estate agent fees.

These are knowledge gaps you can fill for your clients early on in the agent-buyer relationship.

The Non-Negotiables: What Buyers Want (and Don’t Want)

Survey respondents rated their top must-haves and deal breakers when shopping for a home.

The biggest must-haves:

• Washer/dryer hookups
• Parking (garage or an off-street parking spot)
• Outdoor space
• Good natural light
• Walkable neighborhood

The biggest deal breaker was a home that needed too many expensive repairs—like new windows or HVAC systems.

Other deal breakers included:

• Busy streets
• Lack of parking
• High HOA fees
• No laundry hookup

Read the full articles on home searches and buyer compromises for more information.