First-time buyers are keeping up the pace, snatching up homes at more or less the same rate as they were before the introduction of tax credits for first-time buyers that created a buying frenzy back in 2009. In what may come as a surprise, recent statistics from the National Association of Realtors show that first-time buyers amount to between 32% and 36% of the residential property market, reports RISMedia.
According to the NAR, two factors are encouraging first-timer to delve into the market at the moment, besides the fact that rental prices are steadily rising. Lower than ever interest rates and falling property prices are proving to be hugely attractive, although first-time buyers still face a number of challenges in getting onto the property ladder, reports RISMedia. These include the difficulty in obtaining credit these days, as well as higher down payment requirements, and general delays in securing finance.
However, it seems that many first-timers are finding ways around these challenges. One example is the FHA’s 3.5% down payment market share, which has become much more popular in recent years, rising from just 3% in 2006 to almost 30% nowadays. This is in spite of the tighter lending standards and higher borrowing fees that came into effect last year.
Another option proving popular for first-time buyers is the USDA guaranteed loan program, which includes a special program with no down payments required for virgin home buyers.
The article in RISMedia even goes on to ask why there are not more first-time buyers taking advantage of the current climate and snapping up homes. It says that there would probably be a lot more if it wasn’t for the uncertain economic climate. Many younger people are still put off from buying homes, as they are concerned that home values could drop even more, and they are worried about the employment situation. What’s more, many lack urgency as they don’t see mortgage rates going up any time soon.