First time homebuyers are purchasing homes at an increasing rate. A Zillow online survey found that 47% of purchases in the past year went to first time homebuyers…now, it was an online survey, and first time homebuyers are a little more technologically savvy when it comes to anything online, so the results may be skewed a bit in favor of the younger generation – ie. the first time homebuyers. By contrast, the National Association of Realtors conducted a snail mail survey and found that the first time homebuyer number is closer to 32%. Purely based on my own observations, I would lean towards the NAR snail mail survey at 32% versus the 47% Zillow came up with. Either way, the reality is still the same: Percentage of sales to first time homebuyers is increasing, and is expected to continue increasing over the next year.
This is great news. As the financial crises gets smaller and smaller in the rearview mirror, lending guidelines have become a little more favorable for first time homebuyers. In late 2015 Fannie Mae announced that it will decrease the minimum down payment required on their high balance loans from 10% to 5% (ie. Loans between $417,000 and $540,500 in King and Snohomish counties now only require 5% down versus the previous requirement of 10% down). Moreover, they also removed the requirement that 5% of the down payment be from the borrowers own funds, if purchasing a 1 unit home – the entire down payment can now entirely be gifted. These two small moves opened the door to A LOT of first time homebuyers in our region, and it’s good to see millennials taking advantage.
By continuing to relax lending guidelines, Fannie Mae and Freddie Mac are opening the door to more and more buyers, which in turn continues to support the Puget Sound housing market…and all other housing markets nationwide for that matter. Greater Demand à Decreasing Supply = Rising Housing Prices.
To read the full article, please visit: http://www.seattletimes.com/
business/real-estate/survey- more-first-timers-than- expected-are-now-buying-homes/
Today's blog courtesy of Kyle Bergquist, Guild Mortgage