Although younger homebuyers are waiting longer than their parents to venture into homeownership, they are still feeling the urge to purchase their own home.
According to the National Association of REALTORS® 2015 Home Buyer and Seller Generational Trends report released last month, the primary reason millennials purchased a home was simply the “desire to own a home of my own.” Almost 40 percent of millennial buyers identified that as the main reason; other primary reasons for a home purchase included the desire for a larger home, affordability of homes, and the desire for a home in a better location.
Another strong reason for young renters to convert to ownership is the potential for immediate financial return – rental income. First time homebuyers willing to sacrifice a little privacy are buying two and three family homes. Although there are the challenges of managing rental property many former ‘renters’ can reduce their housing costs through the flow of cash from tenants.
The same low down payment programs available from most local banks and mortgage companies for first time homebuyers purchase of a single family home are also available for a multifamily purchase.
– Jon Dawson
Existing-home sales rose in May to their highest pace in nearly six years, largely attributed to a big rise in the number of first-time home buyers, according to the National Association of REALTORS®’ latest housing report. All major regions saw sales increases in May, with the Northeast seeing the most notable rise.
Existing-home sales – measured as completed transactions of single-family homes, townhomes, condos, and co-ops climbed 5.1 percent to a seasonally adjusted annual rate of 5.35 million in May. Sales are 9.2 percent above last year at this time.
The market share of first-time home buyers rose to 32 percent of transactions in May, matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers, NAR reports.
“The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs,” says Lawrence Yun, NAR’s chief economist.
– Jon Dawson
Existing–home sales slowed in April but remained above an annual sales pace of five million for the second straight month, according to the National Association of Realtors®.
Lawrence Yun, NAR chief economist, says, “April’s setback is the result of lagging supply relative to demand and the upward pressure it’s putting on prices,” he said. “However, the overall data and feedback we’re hearing from Realtors® continues to point to elevated levels of buying interest compared to a year ago. With low interest rates and job growth, more buyers will be encouraged to enter the market unless prices accelerate even higher in relation to incomes.”
Total housing inventory at the end of April increased 10.0 percent to 2.21 million existing homes available for sale, but is still 0.9 percent below a year ago (2.23 million). Unsold inventory is at a 5.3–month supply at the current sales pace, up from 4.6 months in March.
The median existing–home price3 for all housing types in April was $219,400, which is 8.9 percent above April 2014. This marks the 38th consecutive month of year–over–year price gains and is the largest since January 2014 (10.1 percent).
Local Realtors report year to date home sales for Penobscot County are up 4% compared with the same period last year with 1174 single family homes sold having a value of $152 million.