First time homebuyers made up 35% of the homebuyers in the month of June. This trend is building and steadily increasing through the year. The National Association of Realtors says:
“The share of first-time buyers increased in March through June—right into the heart of the pandemic period and the surge in unemployment—and is now trending higher than the 29% to 32% average in past years since 2012.” (See graph below):
Why the rise in first-time homebuying?
“The major factor is, arguably, low mortgage rates. As of the week ended July 16, the 30-year fixed mortgage rate dropped to 2.98%. With rates so low that are locked in under a 30-year mortgage, the typical mortgage payment, estimated at $1,036, has fallen below the median rent, at $1,045. For potential home buyers who were thinking of purchasing a home anyway before the pandemic outbreak and who are likely to remain employed, the low mortgage rate may be the clincher.”
Historically low mortgage interest rates are encouraging people to step up and purchase their first home. The average mortgage payment right now is lower than the average monthly rent cost. For this reason it is an excellent time for first-time homebuyers to enter the real estate market. The National Association of Homebuilders says:
“Eighty-four percent of Gen Z’s planning to buy a home are first timers, compared to 68% of Millennials, 52% of Gen X’s, and 21% of Boomers. Looking at results by region shows that over 60% of prospective buyers in the Northeast and South are buying a home for the first time. The share is above 55% in the Midwest and West.”
Despite homebuyers being encouraged, there are still challenges. NeighborWorks America recently performed a study that showed the greatest barrier for first-time homebuyers is understanding the home buying process. Many get overwhelmed by the process and don't understand where to begin.
“Homeownership is a particular challenge for many, despite high levels of interest. Americans believe there are many benefits to homeownership and half of non-owners will seek information about the process in the next few years…a large share of non-owners say the process is too challenging and only a minority know where to find advice if they wanted it. And although many would seek the guidance of community and non-profit programs, only one in three non-owners are aware of such services.”
69% of those surveyed said that the home buying process is complicated. 57% stated they needed guidance on how much to save in order to become a homeowner. You are not alone if you feel afraid or overwhelmed. Finding a trusted real estate advisor is the most important step in home buying. A Realtor will help you every step of the way. A Realtor at Prestige Waterfront Realty will guide you and help you create a plan. You don't have to do it alone.
Step 1: Call Prestige Waterfront Realty at 954-830-7000 or email Tegov@AskPWR.com to connect with an expert that will help you.
Step 2: Call Voget Financial Services at 954-614-9000 for a mortgage pre-approval and plan to get the best interest rate. Email: email@example.com
Trust your largest purchase to the experts. We are here to help. Don't hesitate to contact us.