Spring of 2016 Poses Difficulties for Home Buying Millennials
An improving job market, low mortgage rates and high apartment rentals may finally encourage millennials to invest in real estate this spring. However, NAR’s existing home sales report for February indicates that first-time buyers may find it difficult to find a home. The lower-price market is severely limited, with inventory for homes priced below $250,000 falling 8.2% in January from last year’s stats.
As a result, buyers will most likely face steep competition in finding the right starter home. A Redfin index indicates that requests for property visits rose in the first two months of 2016, with record highs since the brokerage began tracking data in 2012.
Redfind’s chief economist, Nela Richardson, tells Bloomberg, “as soon as a house hits the market, it will be eaten by the huge demand appetite.” NAR data also indicates that the share of first-time home buyers in February dropped to 30% in February, down by 2% from January, but higher by 1% from last year’s data.
Doug Duncan, Fannie Mae’s chief economist, says that affordability will be a challenge this spring of 2016. While potential home buyers may have good credit and a stable job, many may be frustrated simply because the market does not have enough affordable homes for them to choose from. Adding to their burden is the fact that investor sales have been trending recently, making competition all the more challenging for first-time buyers. Since investors pay for their home purchases in cash, the market ends up getting sold-out to these investors before the first-time buyers could even take a pick.
To know more details on how first-time buyers will fare in the upcoming U.S. homebuying season, you may read the complete Bloomberg news article here. If you are interested to purchase a starter-home in Austin, let us help you take your pick; we have listings that may be suitable for your needs. All you have to do is call us at (512) 522-4659 or send us a message and we'll let you know how we can help.