Buyer Interest Is Growing among Younger Generations

Wednesday, October 28th, 2020

Buyer Interest Is Growing among Younger Generations | Simplifying The Market

The demand for homes this year is extraordinary as record-breaking numbers of hopeful buyers continue to shop for homes. In a normal year, the peak homebuying season comes to a close by early fall. However, 2020 is anything but a normal year, and the housing market is no exception. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), explains:

Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season…I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”

What’s drawing so many buyers to the market?

As Yun mentioned, record-low interest rates are key. Today’s rates are strengthening purchasing power for buyers, too. Sam Khater, Chief Economist at Freddie Mac, emphasizes:

“Mortgage rates today are on average more than a full percentage point lower than rates over the last five years.”

If you’re a homebuyer right now, there’s no question that you want to take advantage of this opportunity – and you’re not alone. Competition among buyers is definitely increasing as more buyers enter the market and mortgage interest rates remain so low.

Who’s planning to buy a home right now?

Today’s affordability is appealing to all generations and seems to be especially attractive to younger buyers who want to begin growing their wealth through homeownership. There’s a distinct increase this year in the percentage of those in younger generations searching for homes. The National Association of Home Builders (NAHB) notes:

“Between the third quarters of 2019 and 2020, the share of Gen Z adults planning a home purchase rose three points to 14%. Millennials, however, are the generation most likely to be considering buying a home (22%).”

Here’s a graph showing the year-over-year increase in homebuying interest by generation:Buyer Interest Is Growing among Younger Generations | Simplifying The MarketAccording to Mark Fleming, Chief Economist for First American, millennials are reaching their prime home-buying years, a likely driver in this increase:

“Record low mortgage rates and millennials continuing to age into their prime home-buying years has boosted demand, but a lack of housing supply remains a challenge.”

What’s the biggest challenge for today’s buyers?

Finding a home, however, as Fleming notes above, is clearly a challenge today. Yun also explains:

“There is no shortage of hopeful, potential buyers, but inventory is historically low.”

With so many buyers actively searching for homes this year and so few houses for sale, it’s more important than ever to work with a trusted real estate professional to navigate today’s market. From pre-approval to bidding wars and guidance on down payment assistance resources, having an agent by your side might make the difference in your ability to land your dream home.

Bottom Line

Let’s connect if you’re ready to buy a home. More buyers mean more competition, so you need an expert guide to help you stand out from the crowd.

How Down Payment Assistance Opens the Door to Homeownership

Tuesday, October 27th, 2020

How Down Payment Assistance Opens the Door to Homeownership | Simplifying The Market

Many people are eager to buy a home right now while affordability continues to be a highlight of the current housing market. However, a recent survey by Sparks Research shows that 20% of first-time homebuyers cite a lack of financial education as a barrier to homeownership. This is definitely understandable. If you don’t feel comfortable with the financial process of buying a home, it’s hard to make a confident decision. In fact, four in five homebuyers say they need help to understand what they can even afford in the first place. This is why finding the right professionals to help you through the process is so important.

On top of that, the same survey reports over two-thirds of prospective homebuyers believe they’ll need assistance to save enough for a down payment. What they may not realize is that there are a lot of down payment assistance programs at the state and regional levels, and many of them have funds available for potential buyers. Down Payment Resources recently released its Q3 2020 Homeownership Program Index, which explains:

“The number of total programs is 2,340, and over 81 percent (81.1%) of programs currently have funds available for eligible homebuyers.”

Down Payment Assistance Programs Are Not Only for First-Time Homebuyers

Keep in mind, these programs aren’t just for first-time homebuyers, so it’s worth exploring your options no matter where you are in your homeownership journey. For example, if you’re working from home now, you may be thinking of relocating to a more affordable area where you can stretch your dollar further and have more space, inside and out. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), explains:

“Rural areas have mortgages (USDA loans) that don’t require down payments; and some workers who can work from home may want to consider outer suburbs or small towns where USDA home loans are available and where homes are very affordable.”

If affordability is on your mind and you’re expecting to be working from home long-term, the right home may be in an area you haven’t considered yet. In addition, the assistance program you need might be within reach too.

If you’re interested in learning more about down payment assistance programs, additional information is available through Down Payment Resource. Your real estate advisor can help you decide which option is best for you personally.

Bottom Line

Thanks to a range of down payment assistance programs, affordable options are out there for today’s hopeful homebuyers. It’s important to get the financial education you need to understand the homebuying process and accomplish your real estate goals. Let’s connect today to get you started on the path to your dream home.