NEW RESEARCH SHOWS HOUSING IS AFFORDABLE FOR FIRST-TIME BUYERS
Home prices have been on the rise for the last seven years, leading many housing market analysts to conclude that first-time homebuyers are being shut out of the market due to affordability concerns.
The National Association of Realtors (NAR) reports on the percentage of First-Time Home Buyers (FTHB) on a monthly and yearly basis. Their latest report shows that First time home buyers made up 33% of buyers in March, which matches their reported share in 2018.
NAR uses survey data from their members to come up with this statistic, so their results do not include every transaction completed. Rather, they only the transactions reported by members who complete the survey.
What Is A First Time Home Buyer?
The other entity that reports on first-time homebuyers share is the American Enterprise Institute (AEI). The AEI uses data from mortgage applications that define an first-time homebuyers as “any borrower who did not have a mortgage for the preceding three years.
This means the AEI measurement also includes former homeowners who transitioned out of a home they previously owned and re-entered the market after at least 3 years. The latest first-time homebuyers share data from AEI shows that first-time buyers made up 57.5% of all mortgages in August 2018. NAR’s data shows a 31% share for the same time period.
New research from the New York Federal Reserve shows that these traditional reports on first-time homebuyers share have been unable to give an accurate depiction of this group’s involvement in the market.
First-time home buyers have not disappeared from the market
The NY Fed was able to take consumer credit data and identify when a mortgage payment entered a consumer’s credit report to determine when a first-time home purchase was made. Using this data, they were able to show that AEI’s reported first-time homebuyers share was consistently 10% higher. The NAR reports were right on par with their findings until 2010, when NAR’s share dropped to the 11% gap seen today.
So, what does this all mean?
First-time home buyers have not disappeared from the market as many analysts had believed. Buying a home is very much a part of the American Dream for younger generations, just like it had been for their parents and grandparents.
This also means that rising prices have not scared buyers away from the market. Many first-time buyers are making sacrifices to save their down payment and make their dream a reality.
If you are one of the many renters who is scrolling through listings on your phone every night dreaming of buying your own home, aas a first-time homebuyers, there are opportunities in every market to make that dream a reality!
Ways To Save Money When Getting A Loan!
t pays to do your homework when shopping for a home loan! Your knowledge about home financing can mean the difference between making or losing tens of thousands of dollars. Here are seven simple strategies (I call them “secrets” because so many people disregard them when buying a home) you should consider when financing your home:
Secret #1: Clearly Understand How Much Home You Can Afford
Secret #2: Be Financially Prepared – Ahead of Time!
Before you start looking for a home…
Secret #3: Understand The Basics of Home Financing.
Secret #4: Know The “Insider Secrets” Mortgage Lenders Use To Take Money Out Of YOUR Pocket!
Here’s the secret: Many of the fees and costs are negotiable.
Secret #5: Questions You MUST Ask A Mortgage Lender
When you meet with a lender, be prepared to ask questions. You have a right to this information and a lender will answer them without hesitation.
Secret #6: Work Out A Cost Comparison On Several Lenders To Locate The Perfect Loan!
Take time to evaluate one program against another.
Secret #7: How To Save You Tens Of Thousands On Mortgage Interest
You can save thousands of dollars in interest by making one extra mortgage payment every year! Lenders frequently promote “Bi-Weekly” payment programs (which help minimize the interest you’ll pay by increasing payment frequency) because they make money administering the program.
Finally A BONUS TIP:
An experienced Home Buyer Representative can save you time and money with buying a home by:
Helping you find the perfect home at the right price… so you don’t have to worry you bought the wrong home or paid too much.
Providing you with direction and contacts to get pre-approved for a home loan… so you’re never lost trying to find the most affordable financing for your situation.
Negotiating the best deal with the sellers… so you avoid costly traps and pitfalls. You don't make money when you sell a home, you make money when you buy it!
Coordinating all inspections, appraisals, escrow and title services, with the very best companies… so you feel confident and can focus on other tasks with your move.
To read the full report go to www.LendersRevealed.com and have instant access to the full report!