Trends for 1st Time Home Buyers

Rising interest rates and home prices leave first time home buyers in a squeeze. The budget- busting, double whammy leaves the average first timer with only 70% of the income required for the $219,000 average priced home.

Creative financing and assistance from family is bridging the gap for now. Many new home buyers are taking on additonal risk in order to get their foot in the door. Interest only loans, deferred interest loans and adjustable rate mortgages are riskier, but allow a first time buyer to purchase, when they could not otherwise.

In terms of up front cash needed to buy a home, first time buyers made a 3% down payment, on average. 4 in 10 put nothing down. 25% of those that did make a down payment, borrow it from Mom and Dad.

What is the implication for home sellers? If your property is the price range of the average first time buyer, do what you can to lower the initial cash outlay for purchase. Talk to a few mortgage companies and get a list of financing options and their costs.

Tomorrow, we will take a look at specific tools that make buying your home an easy choice for the first timer. If anyone has a specific question on this topic, please write or email tommi@infotube.net and we will try to help.