2018 Mini Market Update for Home Buyers

"Next year." "When I'm 30." "After I get my next promotion."Buying a home is one of the biggest things I hear people say they are waiting to do. Waiting to check that last box or for the next big thing to happen. Waiting to be ready. When I ask what is holding someone back from buying their first home more often than not we end up with the fear of not knowing. Not knowing how much they can afford, or what the market is doing, or how to get started. Well, I totally get that. Knowing the answers to these questions helps you determine if buying a home is really in the realm of possibilities for you. I 100% believe that knowledge is a powerful tool. It can help put our anxieties at ease and help us make well informed decisions. With that, let’s do a little Mini Market Update.  

First-time Home Buyers

Did you know that last year first-time home buyers made up almost half of all buyers in the United States? That’s a pretty big freaking deal. That means of all the people who purchased a home in 2018 almost half of those people had never owned a home before. They took a leap and decided that they were indeed ready to become homeowners. I’m sure that wasn’t a lightly made decision. Of 10 first-time home buyers 6 of them were Millennials. That figure might stop you in your tracks if you are one of the people saying you’re too young to buy a home?  

The Average American Home

On average the typical American home purchased was “a 3-bedroom, 3-bath house with 2,000 square feet and a price tag of $230,000.” From my experience this past year these facts ring pretty true for first-time buyers in Richmond. Most of my first-time buying clients were looking in the Near West End or a nearby suburb at $250,000 or less. This will likely continue to be the average starting price-point in 2019.  

Financing and Home Loans

Is the amount of your down payment your biggest question mark? You aren’t alone. Being able to afford the down payment for their home was cited as the biggest concern for buyers who have previously been renting. I think we often hear 20% is the average for a down payment, which looks like a scary number if you’re trying to buy in the average home price of $230,000. That’s $46,000!  The statistics aside, now is a great time to layout the welcome mat at your first home. The market has slowed down enough that you can actually take a breath between looking at a home and putting in an offer. A home won't be gone in 3 days like it was in the spring. Right now, you're able to take your time with your lender to ask questions and have them run numbers on a specific home, so there’s no guessing involved with your payment. You’ve likely heard all the hubbub about the interest rates going up. While it’s not as scary as it is sometimes made out to be, the truth is the rates are climbing and by next year could potentially be a full percent higher which will ultimately make a difference in your payment. Long story short, the more you spend on interest the less you can spend on a house. If you're someone who likes to take your time with large purchases and go through all the details the fall is a great time to start your home search - you have time and a good interest rate on your side.  

Happy Hunting,

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