In 2014, only 33% of United States home buyers were first-time homeowners, the lowest percentage since 1987. That number is expected to change in 2015, as real estate market conditions shift to be more favorable to first-time buyers. The home buying process is becoming easier for more house hunters, and with several economic factors changing, first-time buyers may be at an advantage.
One of the biggest factors allowing first-time buyers back into the market are new lending standards. Lenders Fannie Mae and Freddie Mac have put new guidelines in place to make it easier to obtain a mortgage, including offering mortgages with 3% down payments. Several cities also have incentives in place for first-time home buyers, such as lowered tax rates and down payment grants.
Builders are also taking a break from construction of luxury homes to build smaller homes for first-time buyers. The influx of new, smaller homes is expected to allow the prices of existing homes to fall, especially in high-demand cities. Existing homeowners are also likely to take advantage of lower prices to move to bigger, better housing, making their current homes available for first-time buyers.
With rents on the rise and so many lending and government incentives, experts predict that it will be less expensive in 2015 to own a house than to rent. The Federal Reserve has stated that they do not plan to raise interest rates until the summer of 2015, if not later. Real estate market analysts expect interest rates on mortgage to peak at 5% at the most, but believe 4.5% is more likely.
If a new home has been in your dreams for the future, you should brush up on your checklist for buying a home and start looking at real estate agents. With so many favorable market conditions, now is the time for people who were considering the purchase of their first home to act. Visit here for more.