Focus on First Time Homebuyers by Tim McLaughlin
There has been a dramatic shift occurring in the housing sector. According to Realty Times, of the 8.4 million people who have purchased a home in the last two years, 41 percent of them have been first time buyers. This number is up from 35 percent in 2007, and experts believe this growing demographic will influence the home-style landscape in the years to come for first time purchasers.
Today’s first time homebuyers have as much desire to establish household independence as their parents did, but the economic environment has impacted their preferences to some degree. This demographic is much more aware of both how much home they need and what they can afford. But they also have specific preferences in layout, efficiency and neighborhood type according to recent statistics.
On average, over the past few years, first time buyers are buying smaller, lower priced houses than trade up buyers are, the majority buying homes with avg. square feet under 2,500. This buying preference is partially affected by the economy and by maintenance costs, according to Realty Times.
In addition, first time homebuyers seem to have a different mindset regarding a home purchase. They look at the transaction as securing a place to live in first and foremost. While they have less to spend, they want the space they can afford put to the most effective use. This means that the practical spaces they will use every day, like kitchens, laundry rooms and the master bedroom, are their key focus. They appreciate open spaces that can be defined by furniture rather than walls and hallways. Additionally, home location appears to be important to these buyers, who have a keen interest in transit oriented communities. This makes urban areas highly appealing, as well as suburban areas with walk able town centers.
Of biggest concern to this subset appears to be financing questions: qualifications, the right loan structure with the least amount of money down, and understanding an approval process that is much more cumbersome than what their parents had to deal with.
This market is a tough one to navigate…we have very low inventory because of sellers still waiting for appreciation before they will list, but plenty of buyers out looking to take advantage of the great interest rates and loan programs to get into their first home or move up into their “forever home”. In this environment, it is so important to have a Realtor you trust to help you navigate the offer process as well as all of the steps between the contract signing and settlement. Between the appraisal, the home inspection, rent-backs and more…it is important to choose someone you like and trust and who keeps current on laws, best practices and the market pulse to guide you through the process (regardless of how many times you have bought and/or sold a home).
- Loan help for first-time buyers (bbc.co.uk)
- Four New Mortgage Need-to-Knows for First-Time Homebuyers (walletpop.com)