Real estate markets are in a constant state of flux, and 2016 is no exception. For people who want to break out of the rental cycle and make their way into a stable middle-class lifestyle, 2016 might be a good year to take the leap. Conditions for first time homebuyers are quite good right now, but they’re changing quickly.
Houses are Getting Smaller
One big plus is that developers are finally beginning to build smaller and more affordable homes. This is a reversal of a century-old trend of growing homes, and it’s actually great news for first time homebuyers who started their careers in the middle of a massive recession. Financial insecurity among Millennials has led to a big change in home buying habits in that generation.
They’re waiting longer and spending less money on homes than older generations. As millennials reach their thirties, they can’t afford to wait much longer to settle down and start families, and so the demand for these more affordable homes has risen drastically.
Interest Rates are Rising
The Fed released their tight grip on interest rates for the first time since 2006 late in 2015. This is a big deal, because it means credit is going to get more expensive for first time homebuyers. People who have been looking at buying a home may want to strike quickly before interest rates rise to more unfavorable levels.
Rent is Rising
The cost of renting is another strong motivator to become a homeowner. Rent prices have been rising rapidly in the last year and continue to do so now. In more than three quarters of the country, 30% of the median American salary is not enough to cover the cost of rent. As these costs increase, it will only become even more difficult for renters to save the money they need to buy a home.
People who currently have the means, or can get the means, to buy a home, will increasingly move toward buying over renting because of this trend. Luckily, people moving away from the rental lifestyle may help to control the rise of rental costs in the future.
So What Should We Do?
Whether you’re a middle-aged professional or a millennial at their first real job, now is a good time to do your research and find out whether you can take the leap to becoming a homeowner. Many Florida first time home buyers aren’t aware of the mortgage assistance that’s available to them, and many people who can afford to buy a home even without assistance don’t realize that they can with their current budget.
Homeownership isn’t out of reach, even if it feels like it. Mortgage assistance and down payment assistance programs are here to help. Join Mortgage Grants for more information, and to see what grants are available in your area!
For the latest information and access to down payment assistance programs in your area:
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