As of June 2020, first-time homebuyers accounted for 35% of home sales. This is a trend that has increased throughout the years. According to the National Association of Realtors (NAR):

“The share of first-time buyers increased in March through June—right into the heart of the pandemic period and the surge in unemployment—and is now trending higher than the 29% to 32% average in past years since 2012.”

Why the rise in first-time home buying?

NAR continues to say:

“The major factor is, arguably, low mortgage rates. As of the week ended July 16, the 30-year fixed mortgage rate dropped to 2.98%. With rates so low that are locked in under a 30-year mortgage, the typical mortgage payment, estimated at $1,036, has fallen below the median rent, at $1,045. For potential home buyers who were thinking of purchasing a home anyway before the pandemic outbreak and who are likely to remain employed, the low mortgage rate may be the clincher.”

The historically low mortgage rates have encouraged many first-time homebuyers to make the leap and purchase a home. Additionally, the average mortgage payment is currently lower than the average rent payment, making it the perfect time to make a switch from renting to owning. According to the Q2 2020 Housing Trends Report from the National Association of Homebuilders (NAHB):

“Eighty-four percent of Gen Z’s planning to buy a home are first timers, compared to 68% of Millennials, 52% of Gen X’s, and 21% of Boomers. Looking at results by region shows that over 60% of prospective buyers in the Northeast and South are buying a home for the first time. The share is above 55% in the Midwest and West.”

A survey conducted by NeighborWorks America noted that there is a knowledge gap when it comes to purchasing homes. One of the biggest challenges facing first-time homebuyers is the ability to understand the home buying process fully.

“Homeownership is a particular challenge for many, despite high levels of interest. Americans believe there are many benefits to homeownership and half of non-owners will seek information about the process in the next few years…a large share of non-owners say the process is too challenging and only a minority know where to find advice if they wanted it. And although many would seek the guidance of community and non-profit programs, only one in three non-owners are aware of such services.”

If you are a first-time homebuyer getting overwhelmed by the complicated home buying process, you're not alone! This feeling is so common. Whether you are unsure where to start or you want advice to prepare, finding a trusted real estate advisor to work with is crucial to a smooth and painless home purchase. Working with a real estate professional comes with a lot of benefits. They can help you understand the terminology and the process, evaluate your current situation, and help you make a plan to feel confident purchasing your new home.

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If you’re interested in purchasing a home and need help getting started, let’s connect today so you can take advantage of the support available to guide you through each step of the way.