A recent report released by Down Payment Resource shows that 65% of first-time homebuyers purchased their homes with a
down payment of 6% or less in the month of January.
The trend continued through all buyers with a mortgage, as 62% made a down payment of less than 20%, which is
consistent with findings from December.
An article by DS News points
to the new wave of millennial homebuyers:
“It seems that the long-awaited influx of millennial home buyers is beginning. Ellie Mae reported that
mortgages to millennial borrowers for new home purchases continued their ascent in January, accounting for 84
percent of closed loans.”
Among millennials who purchased homes in January, FHA loans remained popular, making up 35% of all loans
closed. Ellie Mae’s Executive Vice President of Corporate
Strategy Joe Tyrrell gave some insight into why:
“It is not surprising to see Millennial borrowers leverage FHA loans because they typically offer lower down
payments and lower average FICO score requirements than conventional loans. Across the board, we’re continuing
to see strong interest in homeownership from this younger generation.”
Bottom Line
If you are one of the many millennials who is debating a home purchase this year, let’s get together to help you
understand your options and set you on the path to preapproval.
If you thought about selling your house this year, now may be the time to do it. The inventory of homes for sale is
well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept
of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is
high. That defines today’s real estate market.
Jonathan Smoke, Chief Economist at realtor.com, revealed in a recent article that:
“The biggest challenge to buyers this spring will be simply finding a home to buy and getting it successfully
under contract. That’s because the supply of homes for sale is at an all-time low, and yet demand is strong and
getting stronger.”
Smoke goes on to say:
“We started the year with the lowest inventory of homes available for sale that we’ve ever seen on
realtor.com. While we did see inventory grow 2% in February, total inventory was down 11% over last year.”
In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of
the real estate transaction including the inspection, appraisal and financing contingencies.
Bottom Line
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas.