Top markets for affordable renovated housing inventory

Despite the rapidly deteriorating affordability, there is some hope for homebuyers in the form of renovated homes: properties that have been rehabbed into move-in ready condition after being purchased at auction.

HousingWire Magazine: December 2021/ January 2022

AS WE ENTER A NEW YEAR, let’s look at some of the events that we can look forward to in 2022. But what about what’s next for the housing industry?

Back to the Future of Mortgage Lending

This webinar will be a discussion on understanding what’s to come in the future of mortgage lending by analyzing past trends in the industry, evolving consumer behaviors and demographics of the industry’s production capacity.

Logan Mohtashami on Omicron and pending home sales

In this episode of HousingWire Daily, Logan Mohtashami discusses how the new COVID variant, Omicron, will impact inflation and whether or not it will send mortgage rates lower.

Real Estate

More first-time homebuyers enlisting help from family, friends

But numbers remain at historic lows

Home prices are rising with no signs of slowing, and affordability is getting worse each month, causing potential homebuyers to turn to family or even friends to come up with a down payment.

The 2019 Profile of Home Buyers and Sellers report from the National Association of Realtors revealed that more than 30% of first-time homebuyers used down payment help from family and friends.

This is despite seeing lower down payments. In 2019, the median down payment was 12% for all buyers, 6% for first-time buyers and 16% for repeat buyers. Lower down payments among homebuyers are another result of rising home prices as buyers find it difficult to save for a down payment. In fact, 17% of all buyers and 25% of first-time buyers used an FHA loan to purchase, likely taking advantage of low down payment programs.

But this hasn’t seemed to help increase the number of first-time homebuyers, with remained at 33% in 2019, significantly below the historical norm of 40%.

“Prerecession, the number of first-time buyers was higher, in part, because buyers had more options,” NAR President John Smaby said. “However, over the past few years, we have unfortunately experienced a scarcity in housing inventory, especially at the middle- and lower-end of the market.”

And this low level of starter home inventory continues to be the single greatest factor keeping first-time homebuyers off the market. NAR chief economist Lawrence Yun explained that buyers report the most difficult step in the home buying process is just finding the right home to purchase, and what buyers want most from their real estate professional is to help them find the right home to purchase.

“Low inventory conditions hurt would-be first-time buyers most,” Yun said. “Their homeownership dream and the opportunity to build wealth gets delayed until more inventory choices reach the market.”

Of course, this low level of inventory has helped one group – home sellers. This year, home sellers received a median of 99% of their asking price and typically sold their home within just three weeks.

The increase in home prices lowered the number of home sellers who reported delaying selling because their home was worth less than their mortgage. This particular share of sellers declined from 9% in the 2018 report to 7% in 2019. However, 20% of sellers who bought their home 11 to 15 years ago continue to report stalling their home sale.

The age of repeat buyers continues to steadily increase over the years, moving from the mid-30s in the 1980s to the mid-50s today. In fact, there is no area that has seen a more rapid and consistent increase than the median age of repeat buyers, which hit a record high of 55 years old in both 2018 and 2019.

Most Popular Articles

FHFA: Government to back mortgages up to $970,800 in 2022

The FHFA today announced the baseline conforming loan limit for 2022 will be $647,200, an increase of 18%. In high-cost areas, the new ceiling loan limit will be $970,800.

Nov 30, 2021 By

Latest Articles

What Omicron, bond market and jobs mean for housing

We often have two to three job reports per year that miss estimates badly. However, remember that we have over 10 million job openings.

Dec 03, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please