first time home buyers Archives - Columbus Ohio Real Estate | Buyer's Resource Realty Services

First-Time Home Buyers Gain Market Share

RealSupport — Wed, 06 Dec 2023 09:26:23 +0000

First-time home buyers made a comeback in 2023, gaining market share even as higher mortgage rates and rising home prices made purchases less affordable. According to the 2023 Profile of Home Buyers and Sellers conducted by the National Association of REALTORS©, first-time buyers accounted for 32% of all home purchases. This is a substantial improvement over the 26% of market share held in 2022.

However, successful first-time buyers are still fewer in number than in years past, when they typically claimed 38% of the market. The high point for first-time buyers was back in 2010, when they accounted for 50% of all home purchases.

The 2023 gain in market share came at a price. The survey shows a median annual household income of $107,000 for first-time buyers, a nearly 20k increase over income thresholds shown in the 2022 survey.

First-time buyers made an average down payment of 9%. About 24% of survey respondents tapped their retirement savings or investment accounts to generate their down payment. 11% of first-time buyers sold stocks or bonds. 11% used funds from a 401k, IRA or pension. 2% reported selling cryptocurrency.

When looking at demographics, most first-time buyers were Millennials with a typical age of 35. This is similar to 2022’s findings, where the typical first-time buyer was 36. 59% were married couples. 70% of them did not have children under 18 years old.

What is unspoken, but evident in the survey, is a widening wealth gap among first-time buyers. Unrelenting home price increases, paired with interest rate levels that are double from two years ago, have pushed home ownership out of reach for a growing number of people.

This is easy to overlook while home inventory is low, and homes are selling quickly. However, there are not enough affordable homes for buyers with the national median income of $74,580, or for those earning less. This is one possible reason why the number of successful first-time buyers are below historical norms.

Now the good news: you don’t have to be rich to buy a Columbus area home, but you do need to be well-informed! Not all homes are priced correctly for their condition or for the prevailing market trends. We show you how to identify value and create a compelling purchase offer in our free e-book, “How to Buy a Home like a Pro!” Get your copy now at the link, there is no charge and no obligation.

As Exclusive Buyer’s Brokers, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Andrew Show
Exclusive Buyer’s Broker, CEBA-M, MCNE, CSP, PSA,e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services www.BuyersHome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

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What Rising Interest Rates Mean for Columbus Home Buyers

RealSupport — Sat, 18 Mar 2017 06:49:03 +0000

As expected, the Federal Reserve raised its benchmark lending rate on March 15, moving its overnight lending rate from 0.75% to 1%. This isn’t earth-shattering news by itself, but Columbus home buyers need to pay attention to it for several reasons.

For example, this is the second rate hike by the Fed in three months, and more increases are expected later this year. Here’s how it could affect you.

Consumers with variable-rate debt, such as credit cards, home equity lines of credit and adjustable-rate mortgages, could see an increase in their minimum required payments in as little as 60 days, depending on the type of debt and its terms.

Mortgage rates have already been trending higher during recent weeks. As of March 16, Freddie Mac’s weekly mortgage survey shows 30-year fixed-rate mortgages averaging 4.30%. This is the highest rate average so far in 2017. A year ago, this same mortgage had a rate of 3.68%.

Here’s another wrinkle to higher rates: they will affect the debt-to-income calculations (DTI) used by mortgage lenders to determine home affordability. If you are carrying variable-rate debts, like credit cards, increases in those rates could impact your monthly debt payments, and affect your front-end DTI.

Front-end DTI refers to the percentage of your monthly income that is taken up by existing debt payments. Back-end DTI considers your new, proposed mortgage payment on top of your existing debt payments. Bottom line: when interest rates move higher across the board, it means you qualify for less house.

When rates move up, and home prices are increasing, the home buying dollar doesn’t stretch as far. This is why progressive increases to interest rates could eventually push some first-time buyers, and others who are on the margins of mortgage qualification, out of the housing market.

As a future home buyer, one of your best defenses against a rising rate environment is to pay down and pay off your consumer debts! We’ll share some debt reduction strategies in a future blog post! And when you’re ready to obtain your mortgage pre-approval, we’ll refer you to trustworthy, local lenders.

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

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First-Time Buyers are Waiting Longer to Purchase a Home

RealSupport — Thu, 20 Aug 2015 06:48:42 +0000

Recent studies by Bankrate and Zillow show that first-time home buyers are renting for about 6 years before buying a home, a trend that has been on the rise since the mid-1990’s. Prior generations of first-time buyers waited about 4.5 years to buy a home. The shortest rental period belongs to the early 1970’s, when renting for about 2.5 years was the norm.

Today’s first-time home buyers are also older than prior generations, with a median age of 32.5 to 33 years old. This has been relatively consistent since the early 1990’s. The youngest median age group of first-time buyers was 29, back in the mid-to-late 1970’s.

It’s interesting to note that mortgage interest rates were much higher back when first-time buyers entered the market earlier. There were also fewer first-time buyer loan programs and incentives during the same period. Why, then, is it now taking longer for renters to become home buyers?

One of the reasons that today’s buyers are waiting longer to enter the market, is that home prices have been gaining ground faster than incomes. The price-to-income ratio currently stands at 2.6%, meaning that homes are costing 2.6 times a buyer’s annual income. At the market peak in 2005, the ratio was even higher at 2.8%. In the mid-1980’s, the ratio was 1.9.

Another factor in delayed home ownership might be simple prudence. Millennials haven’t been in a hurry to buy a home compared to prior generations. However, when they do buy homes, they are marking larger down payments and buying homes in higher price ranges. This could indicate that young adults are making deliberate, well-planned home buying decisions that take long-term ownership into account.

Please keep in mind that national studies cannot speak for local market conditions. Home buyers in Central Ohio have excellent opportunities in the market! Columbus has been named as one of the “easiest places to buy a home” in 2015. It has also been ranked as one of the “best bets for first-time home buyers.” Columbus offers a healthy economy and an attractive quality of life, and our home prices are within reach of median incomes. See our prior blog post about Buyer’s Markets in the Columbus Metro for examples!

Another advantage to Central Ohio home buyers is the availability of Exclusive Buyer’s Brokers! As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

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What Columbus Home Buyers Should Know About Home Equity

RealSupport — Wed, 22 Jan 2014 23:49:19 +0000

CoreLogic’s latest report shows that home equity has improved for millions of homeowners across the country. However, some homes remain in negative equity positions and have a ways to go. In Ohio, it is estimated that 18% of mortgaged homes are underwater in value.

Before we go further, let’s define equity. Equity is the difference between the outstanding debt on a home, and what the home is worth on the market. In other words, equity is the “free and clear” cash value of the home after all mortgages and liens are paid off. To put it bluntly: equity means cash in your pocket when you sell!

When you are buying a Columbus home, buying wisely from the beginning puts you in a good position to earn equity on your home. You can build equity in a number of ways:

Paying down your mortgage
Making improvements on the home that increase its market value
Passively benefitting by gradual increases in market value that happen over time
Any combination of the above

One of the simplest ways to start off on the right foot with home equity, is to have a good down payment when buying your Columbus home. This can be a challenge for first-time homebuyers who have limited funds, and often begin with an FHA-backed mortgage that requires as little as 3.5% down. This doesn’t mean you shouldn’t buy a home, but it will take you a little longer to build equity.

Having home equity can benefit you whether or not you sell your home. You can borrow against the equity of your home to finance a remodeling project, or to pay for a college education, or any other reasonable purpose. Under our current tax code, the interest on a home equity loan is deductible from income taxes if you itemize your return. But use such a loan wisely; once you’ve taken out a home equity loan, you have a second mortgage. This means more outstanding debt and less cash in your pocket when it’s time to sell.

If you plan to retire in your Columbus home, you can put your home equity to work by taking out a reverse mortgage. Simply put, it’s a way of selling your home, but instead of having to move, you get to stay – and the bank pays you to live there for a specified amount of time. These loans require a great deal of caution and good forward planning, but it’s another way to benefit from equity.

Your Columbus Home Buying Strategies

Home ownership can provide you with financial stability and peace of mind. And if you plan wisely and buy smart, your home can build equity and put you in a strong position for the future. While there’s never a guarantee that a home will increase in value, home ownership gives you a chance to earn equity, whereas renting only benefits your landlord.

Begin with good advice! Learn what to look for in your new Columbus home buy reading our FREE e-book , “How to Buy a Home Like a Pro.” You’ll learn tips and tactics that will help you find the best home for the money.

As your Exclusive Buyer’s Broker, we represent you, and only you, in the home buying process! This means we look out for your best interests at all times, and make sure your needs come first. Best of all, our services do not cost you a dime. We’ll be happy to tell you how this works!

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