Purchasing a home can feel intimidating for many young or first-time homebuyers. A recent survey found that homebuyers ages 25 to 40 may be uncertain about the homebuying process and what it entails. For example, 1 in 4 underestimated their buying potential by $150k or more and at least 47% don’t know what a good interest rate is.
If you’re interested in buying but aren’t sure where to begin, don’t let that be an excuse to give up on the homebuying process altogether. Before you get started, here are three concepts about homeownership you should understand.
Young Adults are Underestimating How Much They Need for Homeownership.
Many young homebuyers feel they can’t afford a home that suits their growing needs and have decided to continue renting instead. With many spending more time at home, buyers are looking for larger spaces to accommodate their needs. If they let this deter them from buying, they’ll miss out on some of the long-term benefits of owning a home.
NAR recently published:
“Many young adults are underestimating how much they need for homeownership, the survey finds. Millennials underestimated how much home they can afford right now, how much interest they would pay over a 30-year mortgage, and how much home values appreciate, on average, over 10 years…”
Knowing how much home you can afford when starting the buying process is a critical step in going from renting to buying.
Saving for a Down Payment
Saving for a down payment is viewed as one of the biggest hurdles for homebuyers, but it doesn’t have to be.
According to the National Association of Realtors (NAR), the median down payment for homes purchased between July 2019 and June 2020 was only 12%.
The Longer You Wait, the Less Affordable it Becomes.
With mortgage rates and home appreciation on the rise, putting off buying a home now can end up costing you much more in the future. Most experts forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying power.
Connect with one of our agents today to discuss the homebuying process, what you’ll need to start your search, and what to expect.