American Dream Is To Own a HomeFor generations, part of the American Dream is to own a home. However, first-time homebuyers face various obstacles that often result in renting for longer while struggling to buy their first home. The median age of a first-time buyer has increased to 33, which is the highest in decades.

What obstacles are keeping first-time homebuyers out of the market? Here are a few.

High Home Prices

High home prices can make buying a home more challenging. According to the research team at Realtor.com, in September 2020, the median price of a home was $350,000.

Higher prices are an obstacle for many first-time homebuyers because they result in higher mortgage payments. Plus, higher prices also mean that buyers need to save more for a down payment. Thankfully, low down payment options are available for many first-time homebuyers.

Related: Low Down Payment and No Down Payment Home Loan Options

Low Home Inventory

In early 2020, home inventories had fallen to the lowest levels in almost ten years. Particularly hard-hit were homes under $200,000, which fell 19%.

Many first-time homebuyers have difficulty buying a home when inventory for modestly-priced homes is low. Furthermore, new builds are often higher-priced, larger homes that are out of reach for first-time buyers.

Limited Access to Credit

Lower interest rates are a considerable boon to homebuyers and homeowners alike; however, the lowest rates are not available to everyone because of lending standards.

Since the 2008 housing bubble burst, creditors have tightened their lending requirements. While a buyer may qualify for a mortgage with a credit score as low as 620, the best rates are usually available for buyers with scores over 700.

Homebuyers often have better results using a mortgage broker with access to special financing programs from lenders, including lower mortgage rates, lower fees, and lower down payment options.

Personal Financial Concerns

Today, first-time homebuyers may have higher debt than ever, partially because of student loans, which average $32,731 with a monthly payment of $393. Consequently, first-time homebuyers often struggle to save for a down payment and closing costs while also paying off debt. Not only does debt impact a potential homebuyer’s ability to save for a home, but it also affects their debt-to-income ratio and other factors that mortgage lenders consider.

Finally, many young first-time homebuyers find themselves changing jobs frequently as they grow in their careers. They do not always have the employment stability lenders seek, making it challenging to qualify for a mortgage.

Related: How to Know You’re Ready to Buy a Home

Despite Obstacles First Time Homebuyers Face, Buying a Home is Not Out of Reach

Despite obstacles for first-time homebuyers, buying a home is not out of reach. There is good news too. A variety of first-time homebuyer programs allow buyers to purchase a property with a low down payment, lowering the initial financial burden.

Choosing the right real estate agent makes a big difference. Homebuyers with professional guidance can find the right home in practically any market. Plus, viewing properties as soon as they hit the market is important for buyers in markets like Tampa Bay, where inventory is low and homes sell quickly.

Marimark Realty

Marimark Realty’s real estate agents focus on providing a personalized experience for buyers and sellers of real estate. As a full-service real estate agency, we help clients with luxury homes, homes for first-time homebuyers, commercial property, and investment property.

To begin the journey of purchasing or selling your home, or purchasing commercial or investment properties, contact us at your earliest convenience.