As we discussed a few weeks back, a downpayment is one of the main reasons buyers, especially young ones, prefer to rent rather than buy. Because these individuals have recently joined the working world, it is unlikely they’re sitting on a sizeable amount of cash. Similarly, over half off first time buyers were still struggling to pay off their student debt, according to data complied by the National Association of Realtors (NAR). Even if they’ve managed to amass decent cash holdings during their young careers, in most cases it still won’t be enough to cover the necessary downpayment on a house.
For these reasons the percentage of home purchases by first time buyers has fallen ten percent below its historical average. However, as always, mom and dad have come to the rescue. Last year 27 percent of first time homebuyers used cash gifts from family, mostly parents, and friends to cover their downpayment, NAR data shows. Although this number may not seem that high, only a quarter, it is 24 percent higher than in 2012. With the help of their friends and family, we may see more first time buyers in the Miami area. If you’re a first time buyer interested in one of the world’s fastest growing markets make sure to check out Miami Real estate. Feel free to reach out to a RE/MAX agent today if you have any questions regarding real estate or financing in the Miami area!