(Frederic J. Brown/AFP via Getty Images)
Any buyer of a home currently has to deal with the double burden of high costs and higher interest rates. In addition it’s not a lot of homes available to pick from.
A survey conducted by the mortgage big Fannie Mae found 85 percent of Americans believe that it’s not the best moment to buy a home.
But, some are making the leap. First-time buyers made up more than a third of all homes sold during the twelve months that ended in June according to an annual report from the National Association of Realtors. The record-breaking 70 percent of buyers did not have children less than 18 who resided at the home.
Lance Zaldivar bought his first home in the summer just a few days after being off his position in the Marine Corps. He saved up funds to make a down payment on his final deployment in Kosovo. His fiancée, Jasmin Benitez, also was able to save money due to her work as nurse practitioner.
“My partner is a little less picky than me and at the moment I’m grateful to have her,” Zaldivar says. “She was looking for a tiny space. A little more space within the home. A place where we can have a family to raise our children in.”
In advance, you pay to secure the lower rate of mortgage
The couple purchased a three-bedroom home situated in Montgomery County, Texas, north of Houston at $245,000far below the average of national prices.
The mortgage rate is 6.25 percent, but they have paid an additional amount upfront to receive lower rates during the initial two years until Zaldivar completes his bachelors degree.
“I was really content,” Zaldivar says. “That was a relief in comparison to other interest rates I’ve encountered.”
The average mortgage rate has gone even higher in the time since Zaldivar purchased the property, and were close to the 8% mark this fall, before dropping to 7.5 percent in the last week as per Freddie Mac.
Sellers are clinging to their homes with low-rate mortgages
In the wake of rising interest rates, houses out of the reach of many buyers who are interested in buying. They’ve also deterred people who own homes from selling their properties and taking out low-cost loans. This is one reason why that there aren’t too many “For Sale” advertisements on the market at the moment.
Kristina Dunlap said that there was not much to pick between when her and husband first began seeking a house earlier this year. After three years of living in Nashville the couple decided to purchase a home.
“We determined the amount we paid on rent for three years, and I believe that figure was much more frightening than what current rates of interest are,” she says.
Dunlap is a marketer who freelances along with her husband Eric works as a project manager. They contemplated purchasing a fixer-upper home, however, they decided it was more work than they needed. Instead, they settled for an all-new home in Springfield located just 25 minutes to the to the north of Nashville.
“The entire neighborhood is being built right now. There aren’t any roads that are paved,” Kristina Dunlap says.
The new homes make up a greater portion of sales
A little more than 13% of homes sold during the year were new construction according to the Realtors report. This is an increase from 12% in the previous year.
Like a lot of successful buyers, Dunlap had to make sacrifices, such as shifting away from the city center and forgoing the bonus space she had hoped for. However, she did secure the open-plan floor plan, and the garage with two cars she had envisioned and an area for her dog Kujo.
“The yard was an absolute necessity,” Dunlap says. “When the time comes for him to get — I refer to them as the zoomies. when he is getting them every day twice we simply send him out to let him play the whole thing.”
The purchase cost was just under $350,000. The Dunlaps required about $30,000 to pay for the down payment of 6% and closing expenses.
The down payment is the most difficult part, and the average income of buyers is at an all-time record-high
In the Realtors report, figuring out a an initial down payment is the most difficult thing for many first-time buyers, particularly those who have large student loans and rent.
The average annual income for homeowners of all ages set a record: $107,000. This highlights the issues that middle-income households face when purchasing a house.
“Down the payment and finding the ideal home- the inventory is still extremely tight We are aware that they’re having a tough to find an affordable house,” says Jessica Lautz the deputy chief economist of the Realtors association. “But these buyers are managing to get to the door.”
Lance Zaldivar, his fiancee and fiance relocated to their new residence in June. They didn’t waste any time rearranging. The average homebuyer plans to remain in their home over 15 years, the Zaldivars hopes to maintain his home for longer.
“Whenever we have family, grandkids or great grandkids, they will always visit us at any time and it’ll be the home of Zaldivars,” he says.
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