I’ve always felt that working with first-time home buyers is one of the most satisfying parts of being a Realtor®. First-time homebuyers are so excited and anxious about the process and as Realtors® we get the chance to answer their questions, put them at ease, and watch them realize the American dream of home ownership.
Based on surveys it conducted, the National Association of Realtors® (NAR) recently reported that, despite an improving job market and low interest rates, the percentage of home buyers who are first-time buyers fell to its lowest point in nearly three decades. This is concerning because real estate professionals understand that first-time buyers are critical to a healthy market.
According to NAR’s Chief Economist Lawrence Yun, increasing rental prices and large student loans have made it difficult for young adults to accumulate funds for purchasing a house. In addition, NAR’s survey showed that nearly half (47 percent) of first-time buyers said the mortgage application and approval process was more difficult than expected.
What does this mean to us? As Realtors® we need to be giving all prospective first-time homebuyer as much help as we can to convert them into actual homebuyers.
NAR’s survey showed that the median age of first-time buyers was 31, unchanged from the last two years, and the median income was $68,300 (down from $67,400 in 2013). The typical first-time buyer purchased a smaller and less-expensive home than the typical repeat buyer who was 53 years old and earned $95,000.
As we help first-time buyers navigate the home buying process, we need to ask them lots of questions to help outline their needs and wants and what they can afford. They may want a four-bedroom house but their financial situation may show they can afford a three-bedroom house. If they have large student loans, we may need to help them create a long-term financial plan that will allow them to purchase a home after paying down loans or saving for the down payment.
We need to encourage buyers to ask their Realtors® many questions too. They should be asking us about re-sale value. What types of inspections do they need? What other expenses do they need to expect? Find out if the house is located in a neighborhood with a homeowner’s association. As professionals, we need to guide them to ask the right types of questions.
We know that Realtors® are the most trusted source to provide accurate local real estate information and to help first-time buyers succeed in today’s market. And there’s no better feeling than handing the keys to a new home to a first-time home owner!