The latest report from TransUnion indicates that 8.3M first-time buyers will be entering the housing market between 2020-2022. This 8.2M represents an up tick from the 7.6M first-time buyers during the previous three years.
The challenges for these first-time buyers include the usual…higher home prices, sluggish wage growth and very limited inventory. However, on the positive side of the ledger, these first-timers will also see some daylight with slowing price appreciation and near historically low interest rates.
Joe Mellman, senior vice president and mortgage business leader with TransUnion, said, “…we are optimistic that first time buyers will contribute more to homeownership than at any time the start of the Great Recession.
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Among the ages of 25-34 years, with their median age dropping from 39 to 36 in 2018, the share of first-timers currently participating in the housing market has increased by +6%. Their reasons to buy a home in these next three years include…
- 45% want more privacy
- 44% want to build equity/wealth
- 24% are planning to be married
- 23% are planning to expand their families.
Most of these first-timers (58%) have delayed buying a home thus far due to their concerns about not having enough money for a down payment and/or to cover monthly homeowner expenses. Additionally,
- 51% believe they need to meet a down payment requirement of 10%-20% in order to purchase a home.
- 67% believe they need to have a high credit score.
- 39% want to feel comfortable that they do and will continue to have steady employment.
- 35% believe that home prices are too high.
- 34% are NOT familiar with ANY mortgage options.
Mellman said, “Many of our potential first-time buyers don’t seem to be aware of the wide variety of financing options available for them. This suggests that there is a large opportunity for lenders to proactively identify consumers who are interested in becoming buyers and educating them on options they might not be aware of. Consumers may find homeownership programs that are more flexible than they originally thought…”
This is a great opportunity for you as the go-to agent in you market to prepare and distribute a fact sheet on mortgage options to your prospective buyers.
Another good piece of information from this latest TransUnion report is that 60% of survey respondents indicated that they would relocate to another city or state if lower home prices and/or lower homeownership costs were lower elsewhere.
A great reason to create and build relationships with agents in other parts of the country is for you to be able to make seamless referrals to trusted, like-minded professionals and for you to be able to generate revenue sources from referrals outside your regular market area..