Less First Time Buyers Equals More New Homes for Sale
One of the best things about buying a new home is the untouched – pristine- cleanliness that you are also buying. If you have always dreamed of owning a brand new home, this is the time to find a bargain. At the moment you can choose from a wonderful selection of homes with luxurious touches.
It is generally accepted that most people buying a brand new home are stepping up the realty ladder and are not first time buyers. They have usually done their groundwork with the smaller, older home and are gleefully anticipating a sparkling new home.
However, before buying a new home, the existing home must be sold and this will often be to a first time buyer. There has been a shortage of first time buyers which means less home owners have been able to make the transition up to a brand new home. This explains the problem of why less new homes are being sold in the property market today.
To a lesser extent, this lack of first time buyers is a side-effect of the realty crisis. It takes nerve to step into the realty market and take on a huge debt when you could just carry on renting. Reading of so many foreclosures has kicked the self-confidence out from under a number of younger buyers. They have ‘cold feet’ and are opting to stay renting, or stay in mum and dad’s basement suite.
These figures have been confirmed after some hard mathematical calculations by the National Association of Realtors (NAR). Adding together the national birth rate, and the number of illegal and legal immigrants, the numbers would predict that approximately 1.2 to 1.5 million households will normally start up annually.
These newly-formed households are comprised of renters who have finally saved a down payment, or adult children who have been living in the parents’ basement and are finally ready to move out. Each year a certain proportion of them are ready to invest in a home of their own.
Actual figures show that in 2007, only half of the expected number of new households were started up. To some extent this has caused the property markets to come to a standstill.
In many areas of the USA, builders have a stockpile of brand new homes. Predictions are suggesting that the equivalent of a nine month supply of homes is stockpiled across the nation. In South Carolina, there are over 800 new houses waiting to be bought from several different contractors.
The good news is that according to the Mortgage Bankers Association’s (MBA) weekly survey, first time buyers may be returning to the fray. There are many good reasons why now is a good time to buy your first home, and first time buyers are aware of this and are timidly stepping back into the market. Hopefully they will be encouraged by the large selection they will have.
The MBA announced that the volume of mortgage application requests has just gone up by three percent over the previous week. Copious amounts of media coverage have educated the public into what went wrong. Repeated decreases in the mortgage interest rates have increased public understanding of mortgages. Purchase applications also rose by twelve percent.
The NAR says that as homes are continuing to be built at the same rate, the glut of new homes will grow even larger. All these facts may point to a buyers’ market in the new housing section of realty.
With this in mind, it is possible that deals can be found on the new homes market. Perhaps some optional extras can now be tacked onto the asking price; maybe landscaping or a luxury deck?
