New home construction has been well below the 1.5 million unit per year average of the last 50 years, but housing starts are expected to rise from 776,000 units in 2012 to at least 1.1 million in 2013. Shadow inventory (homes in foreclosure or with seriously delinquent mortgages) has fallen from its high of nearly...
First-time home buyers are playing a larger role in the housing market, but they’re finding big changes.
Thirty-nine percent of home sales nationwide were from first-time home buyers during the 12-month period ending June 2012, according to the National Association of REALTORS®. That’s up from 37 percent a year earlier.
But while first-time home buyers once had a huge inventory of homes to choose from, now they’re finding tightened supplies and steeper competition for what’s left.
Housing inventories are hovering at record lows in many markets, limiting supply. First-time home buyers face increased competition from investors, who are often trying to snatch up the same bargain-priced housing deals. Investors often make all-cash offers, too, which makes it difficult for buyers requiring financing to compete against them. Also, banks have tightened up their underwriting standards, creating more hoops in just qualifying for financing.
It’s not easy to be a first-time home buyer, some say. But first-time home buyers are critical to a healthy housing market. They allow existing home owners to sell and trade up into larger homes.
To respond to the changing housing market, first-time home buyers may need to broaden their search and be more “flexible and compromise,” says Chip Rowand, a Broward County, Fla., real estate professional.
Also, first-timers shouldn’t automatically settle for a Federal Housing Administration mortgage due to the low down payment requirements (usually 3.5 percent of the purchase price). The FHA can have several restrictions that makes some sellers prefer buyers who offer cash or who are using conventional loans, says Stephen B. McWilliam, president of Greater Fort Lauderdale (Fla.) REALTORS®. Some conventional loans require just 5 percent down and so may serve as an option for first-timers.
First-timers also need to be able to act fast and be able to have their financing processed quickly if they are going to stay competitive. Some banks won’t sign off on mortgages for eight to 12 weeks. But some sellers won’t wait that long. Some housing experts suggest first-timers look into working with a community bank or local mortgage banker, which often don’t have as long a wait.
At North Eastern Group Realty, we are prepared to assist first time buyers with their significant Fort Wayne real estate decisions. Our corporate commitment is to provide real knowledge, proven experience and professional, quality service. To search all Fort Wayne homes for sale or find a Fort Wayne REALTOR, visit our website at NorthEasternGroup.com.
North Eastern Group Realty is Fort Wayne’s largest independent real estate company located at 10808 La Cabreah Lane, Fort Wayne, IN 46845.