For first-time homebuyers

Green Escrow Services | Young Family

Interest rates are coming down, inventory is going up, which is a bit of good news for homebuyers. For those looking to buy for the first time, realtor.com suggests these markets (median price included):

  1. Irondequoit, NY ($187,000)
  2. Benton, AR ($197,500)
  3. Winterset, IA ($269,400)
  4. Newington, CT ($290,294)
  5. Council Bluffs, IA ($200,000)
  6. Cheektowaga, NY ($199,000)
  7. Grand Rapids, MI ($260,000)
  8. Moore, OK ($231,475)
  9. Mattydale, NY ($138,450)
  10. Riviera Beach, MD ($269,079)

Poor credit? Other factors to consider

If you are a first-time homebuyer with less than stellar credit – relax (at least a little bit). Fortunately for you, it is common for first-time buyers to have credit issues so there are some options available.

  • Down payment: Paying a high down payment certainly increases your chances at getting a good mortage.
  • Employment history: A strong and long history of employment and a high income to loan value ration will work in your favor.
  • Monthly rent: If your mortgage payments will be similar to what you are currently paying in rent, this shows you can meet the monthly payments.
  • Savings account: A good savings account is always a plus.

Next time we’ll look at specific options at finding a lender when your credit is poor.

Buying s second home, first

Green Escrow | Real Estate online

Many first-time buyers are priced out of the market in their area of choice – particularly in the Bay Area and metro New York – so they’re turning their attention to affordable vacation properties in the less expensive regions. The buyers then rent out the property or use Airbnb to help pay off the mortgage as they continue to save for their man property.

Analysts agree that this strategy is not for everyone and may actually delay the purchase of the primary residence.

Home buyers being patient

Green Escrow | Real Estate

As the median price nationwide for a single-family house increased 4.3 percent to $279,600 in the second quarter, according to the National Association of Realtors, prices in many of the country’s most expensive markets – including San Jose and San Francisco actually declined.

Analysts report that buyers are more cautious and not rushing to buy as in years past, perhaps hoping for further declines. Lower-end properties remained out of reach of most first-time buyers.

Difficult Time for First-Time Homebuyers

Green Escrow | Real Estate News

Despite good mortgage rates and a strong job market first-time homebuyers are having a difficult time in the current market. According to the National Association of Realtors’ 2017 Profile of Home Buyers and Sellers the percentage of first-time homebuyers declined slightly in the last year to 34 percent.

Fist0time buyers made average down payments of 5 percent in the last year, down from 6 percent in 2016.

One of the biggest obstacles for first-time buyers is student debt. Over 40 percent of first-time home buyers have student loans, averaging $29,000.

First-Time Buyers Increasing … Slowly

Green Escrow | Real Estate online

The National Association of Realtors reports in it’s recent Profile of Home Buyers and Sellers that first-time buyers accounted for 35 percent of home sales in the U.S. between July 2015 and July 2016. While this is a 3 percent increase from the previous year it remains significantly lower that the 40 percent which has been the norm.

Growing wages was cited as a prime factor in the increase as well as continued low mortgage interest rates.

Nevertheless, the down payment remains the largest obstacle for homebuyers with nearly 50 percent having difficulties due to student loans while 40 percent pointed to high credit card debt.

New Homes: Bigger and Costlier

Green Escrow | New construction, housing

As mentioned in a recent post – Buyers Looking for Extra Space – the current trend is for larger unit size in new residential construction. In fact, the average size of a new home rose to 2,720 square feet in 2015, a considerable increase over the average of 2,660 in 2014. Nearly 50 percent of the homes built in 2015 had four or more bedrooms and 25 percent of those had garages that would hold three or more vehicles.

However, the National Association of Home Builders reports that average price of a new home in 2015 was $351,000, an increase of $100,000 from 2009.

Given the price of land, construction costs and the difficulty many first-time buyers have securing a loan, much of the this construction is aimed at the high-end or luxury market. Many analysts expected the average home size to fall as first-time buyers entered the market but so far, at least, this hasn’t been the case.

New Homes Getting Smaller?

Green Escrow | Real Estate News

Well, yes – but only slightly.

The Wall Street Journal reports that the size of new homes dropped 40 square feet in the second quarter to 2,479 square feet. This is down from the previous high set in the first quarter of 2015.

According to analysts, the decrease in size could be a sign that builders are focusing more on affordable, entry-level homes. In fact, the National Association of Home Builders predicts that first-time buyers will comprise 18 percent of the market in 2015. While this is a 2 percent increase over 2014 it is far of short of the approximately 26 percent share that first-time buyers comprised in the housing market in the years 2001 to 2006.

Home Sales: Best Since 2007

Green Escrow Services | Adding value to home

According to The Associated Press, home sales in the United States are on pace for their best year since 2007. The job market remains strong, mortgage rates are still low but rapidly rising home prices and the potential of rising loan rates is causing many buyers to act fast. Moreover, many of these buyers are in the housing market for the first time.

According to experts, “demand is off the charts in 2015” with June 2015 the fourth consecutive month of the sales rate exceeding 5 million homes. The median home price now sits at $236,400, higher than the July 2006 peak.

With unemployment down to 5.5 percent – down from 6.3 percent a year ago – many would-be buyers are more confident about their own future and this is strongly reflected in their desire to purchase a new home.

Young Professionals Ready to Buy

Green Escrow Services | Adding value to home

Although the housing market began it’s turnaround in 2012, many first-time buyers and young professionals have been unable to join in due to questions in the labor market and a sluggish increase in wages. Many of these professionals have been forced to rent or move in with their parents. At last, this seems to be changing.

According to analysts, an increase in jobs and a subsequent increase in wages means that many of this group will be first-time buyers in 2015. It is reported that incomes should rise an average of 1.7 percent, the highest increase since 2008. For workers under the age of 45 this increase is expected to be 4.7 percent. Good news, all around.