Thursday, August 12, 2021 / by Flr Team
For a lot of first-time homebuyers, purchasing a home can feel overwhelming and intimidating. Some are unsure about the home buying process and what they can actually afford.
A recent survey of some buyers between the ages of 25-40 found the following to be true:
- “1 in 4 underestimated their buying potential by $150k or more”
- “1 in 4 underestimated the increase in value by $100k or more”
- “47% don’t know what a good interest rate is”
Because of these uncertainties, buyers have given up on their search, or worse, have decided to not move forward with the home buying process because they are discouraged. If you are interested in buying a home but not sure where to start, here are three key concepts about homeownership you should know before getting started.
Down Payments: What you need to know
Saving for a down payment is sometimes viewed as one of the biggest obstacles for first time homebuyers, but that doesn’t have to be the case. According to the most recent Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%. And that number is even lower now. For buyers in the 22 to 30 age range, the median down payment is as low as 6%.
Affording More Home Than You Think
Exercising, working remotely, and generally spending more time than ever in our homes has changed how people are actually living in their space. Some young homebuyers don’t feel they can afford a home that fits their needs and choose to rent instead. Knowing how much home you can afford when starting the buying process is critical and could be the game-changer that gets you from renting to buying.
Homeownership Will Become Less Affordable
With mortgage rates slowly rising along with prices appreciating, putting off the opportunity to buy a home could cost you much more later. Most experts are forecasting interest rates will rise in the months ahead which can influence your buying power. If you’ve been on the fence about buying a home, there’s no time like the present.
We know the process can feel a bit overwhelming, but you are not alone. Contact our team at Florida Lifestyle Realty where we can help you learn more about the process, what you’ll need to get started, and what to expect.
Florida Lifestyle Realty