First-time Home Buyers Haven’t Vanished

March 19, 2012 | Comments Off on First-time Home Buyers Haven’t Vanished

First-time home buyers are snagging up homes at much the same pace they were before the first-time home buyers tax credit created a buying frenzy two years ago. Indeed, for the first seven months of this year first-time home buyers have made up 32 to 36 percent of the market, according to NATIONAL ASSOCIATION OF REALTORS® statistics. 

Low interest rates and fallen home values are drawing more first-time home buyers to the market, at a time when rental prices are rising. However, today’s first-time home buyers certainly are being greeted with more market challenges, everything from higher down payment standards, tougher credit requirements, and delays in securing a mortgage. 

But first-time home buyers seem to be finding options to curtail some of the challenges. For example, the FHA’s 3.5 percent down payment market share has seen a large increase in the last few years, rising from 3 to 30 percent since 2006, even though tighter credit standards and higher fees took effect a year ago. Also, the USDA guaranteed loan program offers a no-down payment program that more first-time buyers are taking advantage of. 

Given fallen home prices and record-reaching interest rates, why aren’t even more first-time buyers taking advantage of home ownership? They lack urgency, particularly since many first-time buyers say they expect home prices to drop further and mortgage rates to stay low. What’s more, they remain concerned about the economy and their personal finances, finds a national housing survey by Fannie Mae. 

Source: “First-timers Hang Tough,” RISMedia (Nov. 1, 2011) and Realtor.com


Comments

You must be logged in to post a comment.

Name

Email

Website

Speak your mind