Harvard’s Joint Center For Housing Study Findings: Portrait of A First-Time Homebuyer
The lifetime milestone of moving from “casually looking” to getting the keys on closing day is one that is unforgettable. The excitement and fulfillment of being a first-time homebuyer is not rivaled by many others: you are finally building equity, acquiring great space, and adamantly gazing into your own bright future!
As things are constantly changing in the real estate market, it’s easy to feel as though you can simply look up from your laptop or tablet one day, and everything is completely different! In years past, it seemed a bit easier to hone in and clarify what types of people always classified as first-time homebuyers.
As summer is in full swing nationwide, this is the time when many are stepping up to the plate and making the life-changing and beneficial decision to purchase a new home. During 2016 and early 2017, there were 3.1 million first-time homebuyers in the U.S., and Harvard University’s Joint Center for Housing Studies honed in with an in-depth study regarding what’s trending now.
Through its research, public outreach, and education, the Center helps leaders in the decision-making process that sensibly addresses the constantly changing needs of cities and communities. With the use of executive and graduate courses and internship opportunities, the Center also works hard to deeply inspire the next generation of leaders in the housing industry.
The completed study showed that current buyers tend to be younger, more diverse, and more likely to have children. They currently are likely to purchase homes on the smaller side, and spend less on housing.
The basic profile consisted of age under 35, married, and already had children. The most common property selected was the detached, single-family home, and square footage was usually less than 1,500. The average home price was less than $200,000, and the study also provided insight on the fact that the shortage of housing in the market is driving up prices at the moment.
For some first-time homebuyers, it means there is ultimately a lower amount to choose from, and they may end up paying more for what they are able to secure. The demographic trends point towards a very vibrant housing market over the next ten years, but really tapping into the market’s full potential and vibrancy will depend on whether or not more affordable options will be on the horizon.
Much of the robust strength in the current market was due to repeat buyers with dual income. An average snapshot of the first-time homebuyer sees them at about a 40% share of the total market, and last year’s survey sees that number at around 32%. NAR chief economist Lawrence Yun claimed that the true missing link in the recovery continues to be the absence of first-time buyers.
In cities such as Phoenix and Maricopa, AZ, builders are in demand, taking advantage of prices that are reasonable considering the sun-kissed amenities of the area, and also the built-to-rent potential. Interest rates are absolutely reasonable, but the limited supply of homes for sale is what is really driving key players in the industry to have brand new construction units that are available to rent.
Renting a detached home is attractive for many of the same reasons as renting an apartment: cutting down on the maintenance factor, not accruing mortgage debt, and the flexibility of a lease. A single-family home is a way for a renter to escape the neighbors above and below them, and offer comfortable space to enjoy if they are a bit gun-shy regarding a brand-new purchase.
Due to the nature of these first-time home buyer statistics, “single-family rental hybrids” have been on the rise. Quartz countertops, stainless steel appliances, resilient flooring, and Energy Star ratings are qualities prospective tenants can expect. Many of these communities are also becoming much friendlier to pets, understanding the connection that tenants cherish with their extended furry family members. Whether you are moving into a brand-new home or thinking about occupying a rental property, an industry professional such as Dorrmat can help you on either end of the transaction. Providing a cash offer for property and rapid closing date, help with loose ends such as moving and extended-stay options, and understanding the necessity for timeliness are all qualities you’ll appreciate when selecting a savvy and transaction-honed party!