First-Time Home Buyers Aren’t Backing Down!

Higher mortgage rates and home prices aren’t deterring first-time buyers yet. Those new to the home-purchase game comprised 32 percent of the market in November, up from a 30 percent share a year ago, according to the National Association of REALTORS®’ latest housing report.

Overall, this has been a good year for this segment of the population. NAR’s 2016 Profile of Home Buyers and Sellers, released in November, showed that the annual share of first-time buyers was 35 percent in 2016, which is the highest since 2013 (38 percent).

“There are fewer available homes during the winter months but also fewer buyers,” suggests NAR President William E. Brown. “With mortgage rates and prices expected to increase as the year goes on, the first few months of 2017 could be an opportune time close on a home.” 
So we suggest let us start your home search now, plus the loan options ASAP!

Source: National Association of REALTORS®

‘First-Time Buyers’ Fuel Latest Home Sales Boost

The market share of first-time home buyers rose to 32 percent of transactions in May, matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers, NAR reports.

“The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low down payment programs,” says Lawrence Yun, NAR’s economist. “More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise.”

As the supply of homes remain tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation, Yun notes. “Without solid gains in new home construction, prices will likely stay elevated – even with higher mortgage rates above 4 percent,” Yun says.

Source: National Association of REALTORS®

‘3 Hurdles’ Home Sales are Facing

Existing-home sales are hitting a snag because of several constraints that the housing market is grappling with, according to the National Association of REALTORS®’ latest housing report. NAR officials note several challenges for the housing recovery:

  1. Less Affordability: “Affordability has fallen to a five-year low as home-price increases easily outpaced income growth,” says Lawrence Yun, NAR’s chief economist. “Expected rising mortgage interest rates will further lower affordability in upcoming months.” Interest rates for 30-year fixed-rate mortgages increased to 4.49 percent in September from 4.46 percent in August, according to Freddie Mac. Rates are at the highest level since July 2011. Just a year ago, 30-year rates averaged 3.47 percent.
  2. Government shutdown: The effects that the 16-day federal government shutdown had on the housing market will likely be revealed in next month’s housing report, NAR says. “Just one impact of the recent government shutdown — delays in tax transcripts needed for approval of mortgage loans — put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report,” says NAR 2013 President Gary Thomas.
  3. Rising flood insurance premiums: Higher flood insurance rates went into effect Oct. 1 and could impact future sales in flood zones, NAR reports. The Biggert-Waters Act gradually removes and reduces federal subsidies for flood insurance on more than a million homes nationwide. It has caused premiums for flood insurance to skyrocket in some areas. “REALTORS® report that approximately 10 percent of transactions in September were located in flood zones, and that nearly one out of 10 of those transactions were delayed or canceled due to concerns over rising insurance rates,” NAR’s report says.

Information to share: by Melissa Dittmann Tracey, NAR