The First-Time Home Buyer
Although some say the first time home buyers are taking up a smaller percentage of the homes bought in the US nowadays, they’re still relevant enough to account for.
The National Association of Realtors reports that in 2013, they’ve only comprised of about 38 percent of the market.
This is only a little bit under the 32 year average of 40 percent.
Considering how big of a chunk they make up out of all of the home sales in this country, it’s smart to think about how you can position yourself and your property to appeal to these people.
What Motivates First Time Home Buyers?
I recently read about some research that Keller Williams did that revealed the top three factors that first-time home buyers think about when they consider buying a home:
- The Current Real Estate Market
- Financial Ability to Purchase
- Location of the Property and Price
With the interest rates at record lows and on the climb, prospective first time home buyers know that now is the time to buy if they’re going to do it, especially considering the low prices on properties and tax credits that are available right now for them.
Good Time to Finance Rental Property
I personally prefer to pay cash for rental properties. But if you’re going to finance it, you want to do so at a time like now where the interest rates are low.
The lower the interest rate, the less you’re going to end up paying for that property, and the more you’re likely to bring-in in net income each month.
Unemployment Rate Going Down
Similar to the real estate market, the unemployment fluctuates a bit each month, but it always trends one way or another if you step back and look at it.
And right now, the unemployment rate is trending down here in the US. That means more people are able to qualify for mortgages on properties.
If you’re looking to rent-out a property that also means that there are more people that can afford to pay you rent if they’re not able to buy a home, or if they simply don’t want to for whatever reason.
The Law of Supply and Demand
Real estate follows the law of supply and demand. When the demand is bigger than the supply, the prices go up. When supply is bigger than the demand, the prices go down.
Right now, the number of foreclosures on the market is decreasing, which is dragging the supply numbers downwards.
As of October 2013, there was a 27 percent drop in the number of foreclosures on the market in the U.S.
That’s a big reason why the values are going up.
Next: The Impact of Inflation on the Real Estate Market and More…