Wondering If You Can Buy Your First Home?
There are many people sitting on the sidelines trying to decide if they should purchase a home or sign a rental lease. Some might wonder if it makes sense to purchase a house before they are married and have a family, others might think they are too young, and still, others might think their current income would never enable them to qualify for a mortgage.
We want to share what the typical first-time homebuyer actually looks like based on the National Association of REALTORS most recent Profile of Home Buyers & Sellers. Here are some interesting revelations on the first-time buyer:
According to the National Association of Realtors’ latest Realtors Confidence Index, 61% of first-time homebuyers purchased their homes with down payments below 6% from October 2016 through November 2017. Actually many of the first time homebuyers I have worked with in the past years paid as little as 3% – 3.5% down!
Many potential homebuyers believe that a 20% down payment is necessary to buy a home and have disqualified themselves without even trying. The median down payment for all buyers in 2017 was just 10% and that percentage drops to 6% for first-time buyers.
Zillow Senior Economist Aaron Terrazas’ recent comments shed light on why buyer demand has remained strong,
“Looking into 2018, rent is expected to continue gaining. More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.”
It’s no surprise that with rents rising, more and more first-time buyers are taking advantage of low-down-payment mortgage options to secure their monthly housing costs and finally attain their dream homes.
According to ATTOM Data Solutions’ 2018 Rental Affordability Report, “buying a median-priced home is more affordable than renting a three-bedroom property in 240 of 447 [or 54% of] U.S. counties analyzed for the report.”
For the report, ATTOM Data Solutions compared recently released fair market rent data from the Department of Housing and Urban Development with reported income amounts from the Department of Labor and Statistics to determine the percentage of income that a family would have to spend on their monthly housing cost (rent or mortgage payments).
Daren Blomquist, Senior Vice President of ATTOM Data Solutions had this to say:
“Although buying is still more affordable than renting in the majority of U.S. housing markets, the majority is shrinking as home price appreciation continues to outpace rental growth in most areas.”
However, the report also shows that the average fair market rent rose faster than average weekly wages in 60% of the counties analyzed in the report (266 of 447 counties). With rents rising, many renters should consider buying a home soon.
Rents will continue to rise, and mortgage interest rates are still at historic lows.
Here in Minnesota the average 3 bedroom apartment rent is about $ 1500 per month. The average mortgage for a first time home buyer purchasing a 3 bedroom house is about $ 1200.
Either way you are paying a mortgage and you have to live somewhere, the only question you have to answer for yourself is: who’s mortgage do you want to pay?
Many first time home buyer, are surprised to find that they only need about $1000 for a downpayment on a house, if they qualify for one of the program that help with downpayment and closing cost.
In some cases, depending on qualification and availability, the downpayment and closing cost (about $6000) is a grant which doesn’t have to be repaid!
Would you like to know if you qualify? Give me a call, 612. 345.9070, or go to my online calendar and set up a time to chat.
It’s free and no strings attached! Just get some information so you can make an informed decision.
Of course it is also important that you feel comfortable about talking to me. You can just click here to hear (well, actually read) what some of my previous clients have to say.
If you would like some information right now, fill out the form on the right side column (on a phone it’s on the bottom) for your complimentary home buyers e-guide. It’s free, because I believe in giving you information you can actually use! I hope you like it 🙂