People looking to buy their first house face adversities in wake of student debt and rising prices
The real estate scenario in the U.S. is getting worse due to constantly rising prices. Those looking to step the property ladder are finding it increasingly difficult to buy their first home because of a number of reasons. In part, this has to do with student loans and half of the first-time buyers owe a minimum of $25,000. As they have to make a down payment, they are having problems making the payment because of lack of resources which delays the process for buying their first house.
Although there is hardship for the new buyers because of the expenses involved and saving for a down payment, there is some good news from the report by National Association of Realtors’ annual Profile of Home Buyers and Sellers. It was revealed that lesser number of people considered the mortgage applications and approval process to be difficult but mortgage interest rates are now rising. The number of listings is low and they are getting less for more. Among those looking for their first house, 41 per cent have student debt which is higher than the previous years’ figures of 40 per cent.
The average amount of debt has also increased from $26,000 last year to $29,000 at present. Realtors’ chief economist Lawrence Yun says that continuing inventory shortage has played its role in keeping first-time home buyers. They have made it difficult for people to buy their first home. He said that houses are moving out of reach for a number of would-be buyers and high prices and investors paying in cash are better placed. Among the total houses up for sale, the majority belongs to the lower end. Since most would-be homeowners look for relatively cheaper homes to begin with, they are facing the most difficulty. According to Black Knight Financial Services, a peak of $282,000 was hit in August after a continuous increase for a period of 64 months.
According to the report, the first-time home buyers constituted 34 per cent of overall sales, which was 35 per cent in the previous year. These figures are fourth-lowest during the 36 years since the survey began.
Among all this, women seemed to be gainers. Single women bought expensive homes compared to single men. The share of single women buyers is 18 per cent, whereas the figure is 7 per cent for single men buyers. The figures for single women are the highest since 2011.
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