Real estate has received a lot of attention since 2020, and for good reason. Speculators and real estate experts point to a number of volatile factors that have affected the real estate market in recent years, and the pandemic is certainly one of them. Real estate prices and mortgage rates rose significantly during the pandemic and have remained well above pre-pandemic levels since then.
Rising house prices and interest rates are having a major impact on young homebuyers, some of whom feel their dreams of homeownership may be out of reach. Also, according to data from the National Association of Realtors, the average age of homebuyers is now significantly older than they were 20 years ago. The average age of buyers in 2023 is 49 years old, an increase of 10 years compared to the average age of buyers 20 years ago.
First-time homebuyers may be facing a tougher real estate market than they were 50 years ago. The following three of her tips will help these buyers successfully navigate the market when purchasing their first home.
1) Rapid progress is expected. Inventory remains very low, so buyers face intense competition for the few homes on the market. The home sales rate at the end of 2023 was the lowest in 13 years, according to NAR data. Therefore, buyers should act quickly to make an offer once they find a home they like, as the property likely won’t be on the market for too long before it sells. In fact, according to NAR research, homes stayed on the market for an average of just 23 days in October 2023.
2) Request a preapproval for a mortgage. The market is competitive for buyers, which means it’s in a buyer’s best interest to arrange financing before they start looking for a home. Mortgage pre-approval is a competitive advantage because it shows sellers that buyers won’t be denied a mortgage or run out of financing after applying. Financial experts at NerdWallet point out that when applying for a mortgage pre-approval, buyers are asked to provide details about employment, income, debt, and financial accounts. Gather this information and resolve any issues such as credit disputes or account delinquencies before applying for pre-approval.
3) Set a realistic budget and expect an offer higher than the asking price. Financial planners and real estate professionals can help first-time homebuyers figure out how much they should spend on a home. In today’s market, buyers should know that they are likely to pay more than the asking price for a home. For example, in October 2023, his 28% of homes sold for above list price, according to a NAR report. With this in mind, first-time buyers may want to look for a home within their budget, hoping to get a higher than list price after viewing properties.
The real estate market remains competitive for buyers. Here are his three strategies first-time buyers can use to increase their chances of realizing their homeownership dreams.
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