THE $41,000 QUESTION???

The $41,000 Question – Where are the First-Time Home Buyers???

That’s the amount of money renters who have been waiting “for the right time to buy” have missed out on by not buying three years ago when prices were at a low point. Nationally, the annual median home price was $166,100 in 2011 and $197,100 in 2013. The median national home price this year is expected to reach $207,000. Forsyth County home sales experienced a similar increase (18%) with the 2011 median price being $220,000 and the 2013 median price being $260,000.

Traditionally, first-time home buyers comprise 40% of the residential real estate market. The most recent data from the National Association of Realtors (NAR) shows first-time home buyers are a shrinking share of the market – making up only about 27% of the market. I checked the numbers for Forsyth County and we are almost identical to the national average with 28% of our market being first-time home buyers.

So the question is, Why are there less first-time home buyers in the market? Lawrence Yun, the economist for NAR says it’s not that they don’t want to buy. It’s that desire is not matching up with their ability. Many young households are carrying student loan debt while job creation and wages have been increasing only slowly. The new Qualified Mortgage Rule limits their ability because it tightens how much student loan and other debt loan applicants can carry. Camille Ford with Guaranty Mortgage agrees that the changes as a result of the new QM Rule have impacted the ability of some first-time home buyers. Camille also says that lack of savings for a down payment is a limiting factor as well.

Mr. Yun concludes that the national housing market is underperforming. In 2000, there were 5.2 million existing home sales and 1.6 million housing starts. Today, home sales are struggling to reach 5 million annually and new starts total only about 1 million. All this, despite the fact that the country has 34 million more people, and mortgage rates remain historically low.

If you are looking to buy your first home, I have a gift for you. A free copy of the book, Your First Home – The Proven Path To Home Ownership. Just give me a call at 678-341-7403 and it’s all yours!

Tim Hopkins
Keller Williams Realty
http://www.tkosales.com