Housing Market Needs More First-Time Homebuyers

January 10, 2013

chicago real estate young buyers

Mortgage rates are low and buyer optimism is high, so where are the first-time homebuyers?

First-time homebuyers’ share of the real estate purchase market is only at 35 percent, according to the Campbell/Inside Mortgage Finance HousingPulse Survey. This is the lowest percentage in the survey’s history, and a healthy housing market should have a first-time homebuyer rate of at least 40 percent.

New homeowners are essential to the real estate purchase market because they often buy homes from a seller who plans on trading up to a more expensive home. Without these first-time buyers, current sellers remain stuck and are unable to move up.

While tightening credit standards are the primary reason for the decrease in new homebuyers, investors are also causing problems for first-time buyers, as it is easier for investors to snatch up property more quickly than the average person.

However, there are still ways for first-time buyers to find the home of their dreams. Prospective buyers might want to check out the Illinois SmartMove Loan Program, which currently offers a variety of affordable loans to first-time homebuyers as well as down payment and closing cost assistance.

Despite stricter lending standards, it is still early in the year, and there is a good chance that the new homebuyer rate will increase. According to Trulia’s 2012 American Dream Survey, 93 percent of young adults want to purchase a new home, and high apartment costs may eventually push more renters into purchasing real estate in Chicago.

About The Author

Read All Stories By Jessica Thom

Visit my Google+ profile.

Leave a Comment