Some of the barriers to homeownership are imaginary says study
Some of the challenges faced by first-time buyers are all in their mind according to the National Association of Realtors.
While barriers such as high home prices and high student-debt are real, NAR’s research shows that some potential buyers wrongly believe they cannot afford a home due to required downpayments.
The association’s Profile of Home Buyers and Sellers found that the median downpayment for first-time buyers has been 6 per cent for the past three years (14 per cent for repeat buyers). But a poll of potential buyers revealed that 87 per cent believe that a minimum of 10 per cent is required.
The desire to own a home is still high and part of the American Dream but affordability is a major barrier for many.
"Nearly all non-homeowners said they want to own a home in the future (87 per cent), but it's evident that higher rents and home prices — up 41 per cent in the past five years — along with limited entry-level supply and repaying student debt have combined to make buying a challenging goal," said NAR chief economist Lawrence Yun.
Eighty per cent of non-homeowners also said that their goal is to buy a home but student loans are a barrier for many.
"In addition to having to postpone important milestones such as getting married and starting a family, many young adults are financially falling behind previous generations in part because of having to prioritize repaying their sizeable student loans over buying a home and saving for retirement," said Yun.
Mortgage applications down last week
The number of new mortgage applications was lower last week, new data from the Mortgage Bankers’ Association shows.
Its index slipped 3.2 per cent on a seasonally-adjusted basis from a week earlier while the unadjusted index was 11 per cent higher. Refinance loans slipped 1 per cent on the adjusted index and were 6 per cent lower on an unadjusted basis.
The share of loans that were for refinances was down from 50 per cent to 49.4 per cent.
Maine real estate agents report strong 2016
Home sales in Maine increased in 2016 by 11.71 per cent compared to the previous year.
Maine Association of Realtors says that there were 17,507 home sales in the year with the statewide median sales price rising 4.93 per cent to $189,400. December sales were up by more than 11 per cent with prices up 4 per cent year-over-year to a median sales price of $185,000.
“Coupled with continued favorable financing terms available to borrowers and confidence in the economy, the strong 2016 year-end gives good momentum for 2017,” said 2017 Maine Association of REALTORS President Greg Gosselin, Owner/Broker of Gosselin Realty Group in York.
“I have spoken with Realtors from all over Maine this month and they report steady calls from sellers preparing to market their properties – and buyers looking to take advantage of ‘for sale’ inventory coming into the marketplace after the holidays,” Gosselin added.