First Time Home Buyers, Millennials, Ready to Buy?

The year is starting off very positive in the Real Estate industry. On a local level, clark county is seeing healthy growth. Listings are up around 10% and pending sales up 24.4% and closed sales 23.7% compared with 2014! We are working with many buyers who are having a difficult time finding a home because of the low inventory levels. According to this article from Fiscal Times, by Marine Cole, the buyer activity has improved compared with last year:

Agents at the real estate brokerage Redfin report seeing some positive signs. In the first three weeks of January, the RSVPs to the company’s home-buying classes were up 27 percent, compared to the same period last year.

Also, in the week of January 12th, 57 percent of Redfin home tours were taken by potential first-time buyers. That’s up from 31 percent the week before and from 48 percent during the same week in 2104.

Related: The Most Expensive Condo Ever Sold in New York: $100.5 Million

“It’s the highest rate of first-timers touring we’ve seen since the end of 2012,” a Redfin spokesperson said.

Certainly many first-time homebuyers (most of whom are millennials) are in better financial shape than they were a year ago. The job market improved significantly in 2014, with three million new jobs created (700,000 more than the previous year), and employment among those between the ages of 25 and 34 has gone up.

Yet many millennials are still struggling to make ends meet, with large student debt loads hanging over their heads. Flat income growth has also been a problem, as has fierce competition for homes in the entry-level price range. This group is also more likely to remain single longer – which potentially reduces their purchasing power.

Related: Obama’s Housing Programs Still More Hype Than Help

Still, many admit to feeling more financially stable than they did a year ago, a report released Monday by Bankrate said. “Millennials have the highest instance of all age groups of noting improved conditions,” the company noted in a release.

Regulators pushed hard last year to pass measures that make it easier to obtain a mortgage, especially for young first-time buyers. Down payment requirements for first-time buyers were lowered from 5 percent to 3 percent – with the caveat that loans acquired through Fannie Mae and Freddie Mac require the borrower to take part in an education program. There are additional requirements as well, including having private mortgage insurance.

The White House also said at the beginning of 2015 that it plans to reduce government mortgage insurance premiums to make homeownership more affordable for low-income Americans.

Interest rates, of course, continue to be low. The rate on a 30-year fixed-rate mortgage has been hovering between 3.58 percent and 3.83 percent, which is near 20-month lows, Zillow Mortgage Rate Ticker reports. Even if the Federal Reserve starts hiking rates later this year, experts say the impact on mortgage rates would be slow and gradual.

Homebuilders are also making first-time buyers a priority: To cater to this group, builders are constructing slightly smaller homes in 2015, helping the affordability issue at least a little for newbie buyers.

Please contact us about any questions regarding the market. We are happy to help! If you are a seller thinking of selling, please go to www.BellaCasaTeam.SmartHomePrice.com for a value on your property. We can then provide a detailed, custom report if you are thinking of selling.

Sincerely,
Michelle Marlahan
Heidi Gowing
http://www.bellacasateam.com

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About clarkcountyhousetalk

Bella Casa Team is a Real Estate group that specializes in Residential Real Estate. They want home buyers and sellers to be informed so they can make the best choice. It is so important to educate the public, especially during this unstable and unprecedented time in the Real Estate!
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