More Transactions for First Time Buyers
Most of the buyers I work with in the Bay Area are first time buyers, so I try to always keep a pulse on not only what they are doing in the market, but what they go through and experience along the way. In talking to most first time buyers – in any age group – you will hear that the pursuit of a home isn’t easy. From saving up for a down payment, to embarking on the loan process, and then getting in the “ring” to slug it out with other buyers competing for limited inventory -it is not easy being a first time buyer in this market. In covering the San Francisco and surrounding markets for 14 years, I can say that its always been tough sledding and competitive. With the right team and planning, however, there are some ways to better equip yourself.
Sales for First Time Buyers
New data shows that first time buyers are starting to pull through, as of this last year. Presently, they account for more transactions presently than they have in the last 12 years here in the Bay Area and the trend matches on the national front. First time buyers picked up the purchase transaction slack by 7% last year over the previous year. Nationally and locally here, they accounted for nearly 55% of all mortgages that were closed. From a lending standpoint and to show how intriguing some other loan options have become, a large number of those loans were with less than 20% down. Lower down payment loans, down payment assistance programs, and even FHA financing are offering buyers more ways to keep cash on hand and still gain favorable loan terms for a new home.
Key Factors Driving Sales
A few key factors are driving these sales in San Francisco and surrounding markets. The stronger job market has led to better salaries, more money saved over time and then increased buying power. Couple that with more lenient lending standards and attractive programs, and you have better access to homeownership than you have seen in over a decade here in the Bay Area. There are fewer and fewer unemployed or underemployed workers in this market segment, as well as long term renters that responsibly saved over 5-10 years for a downpayment to finally move into a home of their own. As well, more borrowers have been able to access gift funds – part of the more flexible lending climate – from family members, etc. to increase their buying power and make more competitive offers in a fierce market.
With housing formations taking on a new growth pattern, especially amongst millennial, the trend is only going to continue, in my option. Despite the recent uptick in interest rates, affordability has not been hurt and prices remain in an upward trend. I only see more people jumping off the fence to enter the game of ownership here in 2018, as waiting longer could be costly. The right team, strategy, and approach can make this all happen for first time buyers, even in the most competitive market in the country. Email Meto learn more about your buying power and options.