Real Estate News

Can first-time buyers find their footing in fall?

Published: 25 Sep 2017

The housing market hasn't been easy for first-time buyers over the past two years. As the economy improved and more people found themselves able to afford a home purchase, many Americans - particularly young adults - flooded the market, significantly increasing competition and driving home prices upward while mortgage rates stayed low. Fortunately, the fall may provide first-time shoppers with a little relief.

The inventory of starter homes in the 100 largest markets nationwide actually tends to rise by about 7 percent in the fall, peaking in October, according to new data from Trulia. Meanwhile, the decline in competition that typically comes with the end of the summer shopping season allows prices to drop, hitting ebbs nearly 5 percent lower than summer peaks from late fall into early winter.

Conversely, starter home inventory tends to drop by about 20 percent during the summer.

Starter homes are still hot commodities for first-time buyers.Starter homes are still hot commodities for first-time buyers.

What summer brought
Even in smaller markets where home prices are significantly lower than the national average, competition for starter homes is fierce and has led to many of these properties being sold within just a few days of being on the market, according to the Southern Indiana News and Tribune. For instance, the average for the number of days homes priced between $100,000 and $150,000 spent on the market in the Hoosier State was just 75 in the most recent data, and anecdotal evidence suggests some are moving far more quickly than that.

"Right now I'm showing a $114,000 house in [Jeffersonville, Indiana] and there's already an offer on it, and it's been on the market for eight days," Matt Lincoln, a real estate agent at Schuler Bauer Realtor in New Albany, Indiana, told the newspaper.

Similar issues have been reported all over the country, especially in and around major urban centers.

A potential hurdle
One of the issues long mentioned in the housing market as to why young people weren't buying in larger numbers was their student loan debts, and that's a trend that continues even now, according to the National Association of Realtors. Nationwide, people of all ages owe some $1.4 trillion in student loan balances, and 76 percent of them say those debts impacted their decisions to buy a home in 2016.

Likewise, more than 3 in 5 said the funds they pay for student loans would otherwise go toward building a down payment for a future home, and 85 percent of those respondents say that's the biggest impediment to saving money. Moreover, just 20 percent of those with student loan debts said they currently own a home.

First-timers who do feel they're in a position to buy, regardless of their student debt loads, likely have a lot to learn about everything they need to do before, during and after the sales process is complete. That list should include familiarizing themselves with the ways in which title insurance can help protect both buyers and sellers if defects or other issues related to ownership of the property arise. Having a clear understanding of this aspect of the sales process and others allows shoppers to make the most informed decisions possible.