Young adults are getting married later than previous generations. In 1980, the median age for men and women at their first marriage was 24.7 and 22, respectively. In 2018, the ages increased to 29.8 and 27.8, for men and women, respectively.

But this delay in marriage isn’t deterring them from homeownership, though. Almost a quarter of millennials say they are postponing marriage until after they buy a home, according to LendingTree’s latest survey.

Millennials make up the largest share of homebuyers at 37%, according to a report from the National Association of Realtors. This new LendingTree research suggests that even more of them are preparing to buy a home within the next two years.

We surveyed adults ages 22 and older who are thinking about entering the housing market to determine their attitudes and thoughts toward homebuying. Here’s a deeper look at the results.

Key findings

Nearly a quarter (24%) of millennial first-time homebuyers want to own a home before getting married.

On the flip side, this means just over 3 in 4 millennial buyers (76%) want a marriage before a mortgage. Additionally, 27% of millennial buyers are postponing parenthood until they’ve achieved homeownership. Among homebuyers of all ages, nearly 2 in 5 are waiting to get a pet until after purchasing a house.

First-time buyers often underestimate how long it takes to get to the closing table.

Misunderstandings about the mortgage closing process underscore the importance of homebuyer education. Nearly half of first-time buyers believe the mortgage closing process will take 15-30 days and about 14% believe it’ll take less than 15 days.

The average time to close is 43 days, according to data from mortgage tech firm Ellie Mae. Most mortgage closings happen within 45 to 60 days.

Additionally, just over a quarter (26%) have the required documents necessary to complete a mortgage application.

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More than a quarter (26%) of first-time buyers have poor credit.

Just 15% of first-time buyers have a score of 740 or higher. Nearly 2 in 5 (38%) aren’t satisfied with their credit score, yet more than a quarter of those who are dissatisfied haven’t taken steps to improve their score. By contrast, more than 70% of repeat homebuyers are satisfied with their credit score.

Buying a home with bad credit can be difficult, but it’s not entirely impossible. For example, the Federal Housing Administration insures FHA loans for eligible homebuyers with a credit score as low as 500. However, taking the time to improve your score before applying for a mortgage will save you money in the long run.

The top two barriers to homeownership are a low income and lack of savings.

Nearly a third (32%) of first-time homebuyers say a low income has held them back from buying a home, and another 27% attribute the hold-up to not having enough savings. Other obstacles include student loan and credit card debt, as well as not being ready to commit to a mortgage and settle down in one neighborhood.

A majority of first-time buyers (61%) think there’s a shortage of homes for sale.

Nearly two-thirds of first-time buyers believe there is a shortage of affordable homes for sale in their area. This tracks with an analysis from the National Association of Realtors that reports a continued lack of housing inventory. At the end of February 2019, the latest month for which data is available, there was a 3.5-month supply of homes for sale. A six-month supply is considered a balanced market for both homebuyers and sellers.

Other takeaways

Our survey also found that today’s profile of a first-time homebuyer looks different from the profile of yesteryear. The percentage of single, first-time homebuyers is 43%, and almost half of first-timers are childless.

More than 2 in 5 (42%) first-time buyers have credit card debt. The percentage of repeat buyers with credit card debt is slightly higher at 44%. Additionally, the most stressful part of the homebuying process for nearly half of first-timers is finding a home that fits their budget.

More than 6 in 10 think mortgage interest rates are too high, which makes it challenging to stay within their budget. This is despite a downward trend in rates over the last few months. The average 30-year fixed-rate mortgage was 4.51% in early January 2019 and has since dropped to 4.12% as of April 11, according to Freddie Mac’s Primary Mortgage Market Survey.

Most first-time buyers want a home with a sticker price of $150,000 or less, and nearly 85% would consider purchasing a fixer-upper to cut costs.

We also found that 46% of first-time buyers plan to live in their home for at least 16 years.

Kicking off the spring homebuying season, March sales climbed almost 29% over February, according to the RE/MAX National Housing Report. But this remains the slowest start in five years, with March sales 8.6% lower than March 2018.

March was the eighth consecutive month of year-over-year sales declines and the sixth straight month of year-over-year inventory growth, with a 5.3% gain. Housing activity in the report's 54 markets nationwide also saw the Median Sales price grow by 3.4% year-over-year – notably smaller than the year-over-year increases in February (5.5%) and January (4.6%).  However, the median sales price has risen by more than 3% year-over-year in 17 of the last 18 months.

From 2015 to 2018, the housing market's spring sprang to life with an increase in sales from February to March averaging 37.0%. March 2019's month-over-month increase of 28.8% was the smallest since 24.6% in 2014.

Days on Market increased to 59 from 57 last March, while Months Supply of Inventory declined year-over-year to 2.7 from 3.0.

"It was encouraging to see month-over-month sales improve during March," said RE/MAX CEO Adam Contos. "Although the seasonal bounce that typically ends the first quarter wasn't as strong as in the past few years, conditions are in place for a healthy spring selling season. Falling interest rates, rising inventory and moderating price increases against the backdrop of a healthy overall economy are cause for optimism for buyers and sellers alike."

Closed Transactions

Of the 54 metro areas surveyed in March 2019, the overall average number of home sales is up 28.8% compared to February 2019, and down 8.6% compared to March 2018. Leading the month-over-month sales percentage increase were Burlington, VT, at +48.3%, Wichita, KS, at +46.8%, and San Francisco, CA, at +44.3%.

Median Sales Price – Median of 54 metro median prices

In March 2019, the median of all 54 metro Median Sales Prices was $246,000, up 2.5% from February 2019, and up 3.4% from March 2018. Two metro areas saw a year-over-year decrease in Median Sales Price:  San Francisco, CA, at -3.8% and Hartford, CT, at -1.4%. Three metro areas increased year-over-year by double-digit percentages – Manchester, NH, at +12.2%, Omaha, NE, at +11.8%, and Wichita, KS, at +10.7%.

Days on Market – Average of 54 metro areas

The average Days on Market for homes sold in March 2019 was 59, down three days from the average in February 2019, and up two days from the March 2018 average. The metro areas with the lowest Days on Market were Omaha, NE, and San Francisco, CA, both at 31, and Denver, CO, at 35. The highest Days on Market averages were in Augusta, ME, at 122, and Burlington, VT, and Hartford, CT, both at 97. Days on Market is the number of days between when a home is first listed in an MLS and a sales contract is signed.

Months Supply of Inventory – Average of 54 metro areas

The number of homes for sale in March 2019 was up 0.3% from February 2019 and up 5.3% from March 2018. Based on the rate of home sales in March 2019, the Months Supply of Inventory decreased to 2.7 from 3.7 in February 2019, and from 3.0 in March 2018. A six-months supply indicates a market balanced equally between buyers and sellers. In March 2019, of the 54 metro areas surveyed, only Miami, FL, at 6.5 reported a supply at or over six months, which is typically considered a buyer's market. The markets with the lowest Months Supply of Inventory were Denver, CO, at 1.2, and four metros at 1.3 – San Francisco, CA, Seattle, WA, Boise, ID, and Manchester, NH.

For mortgage lenders there is a big battle to be one of the first people to reach a potential borrower. That’s because statistics show that 88% of consumers go with the first or second lender they talk to. That’s no surprise, how often do consumers really want to have a one-hour conversation regarding the same financial topics. Especially millennials.

According to Mike Eshelman, Head of Consumer Finance for Jornaya, recent MBA statistics show that the servicer recapture rates have fallen 17%. He quotes Marina Walsh, the MBA’s VP of Industry Analysis and Research, as saying that only one in five borrowers who are looking to refinance or buy a home will use the same servicer.

Current strategies to compete for the consumer include:

• Getting a lead from a credit trigger – problem here is that the consumer might have already filled out a loan application with someone else and the credit bureau is selling the same lead to other people. Are you really going to be the first or second lender?
• MLS Listing Alerts – the borrower is already talking to a realtor, who is likely to refer them to a loan officer they know and consistently work with
• “In the Money” models – usually used for refinancing on portfolios
• Call, text, email, direct mail and retargeting – this can be expensive and can cause customer dissatisfaction.
• Lenders are forming real estate partnerships for referral business ( Zillow/Zillow Home Loans; Opendoor/Movement Mortgage/VIP Mortgage; Quicken/Rocket Mortgage).

So why are servicers having such a hard time? The potential problem is that these tactics are either reactive or just very general in nature. Also, the top of the sales funnel seems to have moved. Now that companies like Jornaya can identify online search habits of consumers the funnel moves to when borrowers are thinking about taking out a new loan, not when they trigger a lead. According to Jornaya, borrowers start shopping online 171 days prior to filling out an application, they go to an MLS site about 71 days prior and pull credit 68 days prior.

[caption id="attachment_11849" align="alignleft" width="225"] Mike Eshelman, Head of Consumer Finance, Jornaya[/caption]

Ellie Mae statistics show that 95% of consumers start their search online. Yet on average 5% of web visitors completed an application online. This means there is a large number of potential borrowers online but not fully engaged.  Jornaya looks for signals that a borrower might be “in market” by monitoring their behaviors across the consortium of participating partners across their 35,000 website network. This data is then supplied to lenders and servicers to help increase retention rates and origination efficiency.