First-timers could be missing housing ‘sweet spot’
With low mortgage rates and fallen home values, some housing analysts are questioning why more first-time buyers-particularly the younger generation-aren’t moving into the market.
A recent Reuters article questioned the reluctance: Could they be missing out on the “sweet spot” of the housing market by delaying their home purchases?
The desire to buy is certainly there. Ninety-three percent of renters in the millennial generation say they plan to buy a home in the future, according to a poll by Trulia. But the number of first-time homebuyers remains low: One in three homebuyers is first-timer, the article notes.
“Maybe that’s because some millennials-generally those now in their 20s to early 30s-don’t have the jobs that qualify them for mortgages, or because they are taking time to accumulate down payments, or because the ongoing wave of foreclosures has frightened them,” wrote Linda Stern, a Reuters columnist.
Whatever the case, they may still have some time to cash in, particularly as long as financing a home purchase remains so low. The Fed announced it is keeping interest rates low until the unemployment rate drops below 6.5 percent, which the Fed doesn’t expect to happen until 2015.