The housing market is still growing stronger from the recession. While overall it is strong now, a major key to housing recovery could be first-time homebuyers. According to the National Association of Realtors, 30 percent of home sales in 2015 were made up of first-time homebuyers. However historically, sales are made up of 40 percent first-time homebuyers.
“In terms of the real estate recovery, the missing link is first-time home buyers,” says Rob Chrane, founder and CEO of Down Payment Resource. “They’ve been at record lows. Part of it is legitimate reasons. Part of it is just ignorance.”
Why? Without first-time homebuyers, the entire housing cycle is affected. People selling their homes can’t move up, and retirees can’t move down.
Where are the first-time homebuyers with the key to housing recovery?
We do know that millenials aren’t to blame for a lack of first-time homebuyers: according to a survey conducted by Fannie Mae, 56 percent of respondents between the ages of 18 and 34 plan to buy a home the next time they move. There are several other factors affecting why the number of first-time homebuyers is lower recently.
“Ignorance about the process, concern about the economic outlook, and some skepticism about ownership are all hobbling the return of first-timers,” according to a recent article by MarketWatch.
Fannie Mae found that many first-time homebuyers are unfamiliar with low down payments like those offered by the Federal Housing Administration. In reality, people can purchase a home and put as little as 3 percent down.
“There are more options out there than they realize, and they really need to look into them before they give up,” says Chrane.
To unlock the key to housing recovery and encourage first-time homebuyers to follow through, there needs to be more information and communication about real down payments. If you are exploring buying your first home in Miami and are curious about downpayment options, contact an agent at RE/MAX Paradise today! We are happy and equipped to answer your questions.