Joseph and Kayla Simons aren’t your typical first-time home buyers.
Armed with low interest rates, bargain prices and good income, the young couple sidestepped a starter home and bought a 3,000-square-foot house on a tree-lined street in Maple Grove, Minn.
“Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple,” said Joseph Simons. “Why not buy a forever home with everything we want?”
Real estate agents say more twentysomething, childless buyers are snapping up sprawling homes instead of starting out small. It’s a trend that’s gaining momentum as young buyers seize on some of the best housing deals in history.
While the shift is unlikely to kick-start construction of new subdivisions filled with McMansions, it’s helping to revive sales of midpriced and upper-bracket houses. The Simonses, for instance, initially planned to spend about $200,000 on a townhouse, but ended up spending tens of thousands more once they started shopping.
“The more starter homes we saw, the less impressed we became,” Joseph Simons said.
Clearly, most first-timers don’t have the financial muscle to buy their dream house, but with rents on the rise, the Simonses and other young buyers face competition from investors who can pay cash for inexpensive properties they can use for rentals.
For the Simonses, increasing their budget increased their options, even though they bought a house that has far more space than they need.
“At this point the house still feels a little big, but we love it,” Joseph Simons said. “And when we decide to start a family, we don’t have to go anywhere.”
This shift to larger homes runs counter to buying trends in recent years that showed higher demand for smaller houses. When the recession hit, many builders decreased square footage and touted their homes as more efficient and economical for buyers.