Posted by: phillipsre | February 27, 2013

Where are you first-time home buyers?

Open-HouseThat’s the question a lot of realtors and sellers are trying to figure out. A new study by Lawrence Yun, chief economist for the National Association of Realtors, estimates that there were 2.2 million fewer first-time purchasers in the United States between 2008 and 2012 — a deficit of about 450,000 a year, more on this trend is featured in the article from the Seattle Times. 

This is not a good situation for those that were first time home buyers, just a few years ago and now are ready to move up to a newer home. Without first-time home buyers, there is no one to purchase these entry-level homes. Unfortunately, the common theme among first time buyers is impacting the sales; these 20-30 year olds have student loans to pay off so they are not willing to add additional debt, therefore they will either move back in with their parents or possibly rent. Additionally, with the unemployment rate up it is harder for people to find jobs, again, an issue that will hold up your loan process. Which leads this demographic to look into temporary housing, like renting which gives them more flexibility to move if a new job is found and also is less of a financial burden, when other bills are piling up.

Another drawback for these first-time buyers is the increased competition in the housing market. These first-time buyers have to compete with other buyers and investors that may come to the bargaining table with strong credit and all cash offers. The best advise for these first time buyers is to have your loan approved and underwritten before shopping for a home and work with an agent that understands the process fully and can put together a strong, uncomplicated offer for you.

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