Millions of U.S. citizens strongly desire to buy their first home this year. Unfortunately, due to factors such as stricter lending protocols, escalating prices, and limited availability, their wish may not come true.
The majority of people who responded to a Zillow survey claimed they were certain they could afford to buy a new home in the coming year, but many will run into various obstacles that will ultimately prevent them from attaining that goal.
The American dream of owning a home is still very much alive for many people, according to Zillow’s chief economist, Stan Humphries. He warns, however, that people’s aspirations must align with contemporary conditions.
In several areas, many Americans will probably experience difficulties in trying to arrange a mortgage.
A minimum of 5% of U.S. residents who took the survey claimed they want to purchase a home within the coming year. This desire is especially strong among people who rent — 10% of whom want to buy a home.
Translate those percentages into hard numbers and you come up with more than 4 million potential first-time homebuyers. That’s double the number of Americans who purchased a home in 2013.
But this likely will not happen. Inventories of homes for sale are indeed slightly up, but there are still local area shortages.
Also, in some key markets such as New York, Seattle, and San Francisco, low home availability translates into soaring prices that most aspiring first-time property owners just can’t afford. Across the nation, home prices on average are up about 11% since last year, according to the national home price index statistics.
In the mean time, mortgage rates have been on the rise as well. Compared to a year ago, the rate for a 30-year fixed mortgage is approximately 4.3% on average. That equates to a rise of around 0.8%, which makes a 30-year home mortgage on a $200,000 loan around $90 per month higher in cost.
Suggested Reading – 5 Important Actions to Take After Buying Your First Home
Even when a homebuyer finds a deal he or she can actually afford, landing a loan may still be beyond reach. Home lenders nowadays require stellar credit scores, stable job histories, and well-documented incomes, along with a significant down payment of at least 20% or more in order to qualify for a good mortgage deal.
Homebuyers who have shaky credit scores or little to no cash to put down can frequently get a mortgage with the support of the FHA (Federal Housing Administration). However, of late that organization has been increasing its fees and modifying the terms of its loans, which has made them less appealing.
Renters who live in Las Vegas, Atlanta, and Miami all expressed the strongest desire to buy a home, according to the Zillow survey. Home prices in the southern Florida metropolitan area are still around 40% below their highs, and the average home sales recently are significantly under $180,000, which makes them considerably more affordable than in other large cities.
For the time being, renters who live in Minneapolis, Los Angeles, and San Francisco remain hopeful and continue to dream about purchasing a home next year. Get more information visit here key markets such as New York.
Alice has many years of knowledge as a real estate agent. Now she works as a consultant to other real estate professional. If any of our reader’s has any query, suggestion, you can contact through this blog.
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