Get free access to our world class MLS search tools, save your favorite listings, create saved searches & much more!

The Big Challenges Home Buyers Face in 2017

Posted by Mastura Zaini-Roberts on Tuesday, January 31st, 2017 at 2:12pm.

What are the top challenges your home buyers face this year? A recent survey from realtor.com® reveals the following:

1. Low inventories: There aren’t enough homes for sale and inventory woes are expected to worsen this year. Active inventory in December 2016 on realtor.com® dropped 11 percent compared to a year ago. “As a result, the year has started with the lowest inventory of homes for sale at least since the recession, and possibly in decades,” realtor.com® notes. “Inventory was a challenge all year but a stronger offseason in the fall depleted the available homes for sale even more than is typical.”

2. Prices move to record highs: Typically, asking prices decrease in the fall. However, this year, the median list price in December was the same as it was in July -- $250,000. That is a record high for December. It’s also a year-over-year increase of 9 percent.  

3. Rising mortgage rates: For experienced buyers, rising mortgage rates has prompted an urgency for them to buy before any further increases. Average listing views on realtor.com® surged 40 to 80 percent in the last three weeks of December 2016 compared to December 2015. “Rising rates have made demand even more intense,” realtor.com® notes. However, the demand mostly seems to be coming on stronger from repeat buyers. For first-time buyers, rising mortgage rates are having an opposite effect and they’re showing signs of beginning to shy away from the market.

4. First-Timers Are Worried; Repeat Buyers Are in a Rush: The number of first-time buyers planning to purchase this spring has dropped sharply and the rise in mortgage rates over the past few weeks may be to blame for their retreat, according to realtor.com® study. Repeat buyers, on the other hand, want to lock in rates right away.

Forty-four percent of active home buyers who plan to buy a home this spring are first-time home buyers, down from 55 percent last fall who said they were planning to buy in the spring. So what’s spooking them?

The average 30-year fixed-rate mortgage has gone up to more than 4.2 percent by the end of December 2016, realtor.com® notes. It was averaging 3.4 percent for most of September 2016. Average rates today are about a half percentage point higher than they were in 2016. That means a median-priced home financed with a 20 percent down would cost an extra $720 per year in added interest, realtor.com®’s study notes.

"Last fall, we saw a large jump in the number of first timers planning home purchases, which was very encouraging because their market share is still well below pre-recession levels," says Jonathan Smoke, chief economist for realtor.com®. "But, as evidenced by their decline in share, first-time buyers are really dependent on financing and affordability is one of their largest barriers to home ownership. This number could continue to decline with anticipated increases in interest rates and home prices."

First-time buyers are nearly five times more likely than repeat buyers to say they are facing challenges qualifying for a mortgage. Affordability topped first-time buyer concerns.

In November, first-time buyers made up 32 percent of all buyers, according to the National Association of REALTORS®.

"The rise in rates is associated with an anticipation of stronger economic and wage growth, both of which favor buyers," added Smoke. "At the same time, higher rates make qualifying for a mortgage and finding affordable inventory more challenging. The decline in the share of first-time buyers since October suggests that the move up in rates is discouraging new home buyers already."

On the other hand, repeat home buyers realize mortgage rates – while moving higher overall – are still at historical lows. Before rates jump more, these buyers are in a rush to close before rates increase further, according to realtor.com®’s study.

 

 

Source: Move.com

 

 

Mastura Roberts
(702) 710-3330
offers@greatlasvegashomes.com

Team Leader, The Tonnesen Team
Berkshire Hathaway HomeServices, Nevada
3185 St Rose Pkwy #100 Henderson, NV 89052

With over 30 years of experience helping families call Las Vegas "home!"

Related Blog Posts

What Not to Compromise on When Buying

Buying a home can be a laborious task, especially when all the little details are considered. If the search is taking forever, or multiple offers fell through, it can be very tempting to compromise on certain wants and needs in order to finally secure a new property. While some items are definitely worth compro...

Black Friday Real Estate!

For the past three years clients have been telling us they want a “steal of a deal” on Las Vegas real estate. So how come most of them stop looking in December? All month long, December is the Black Friday of real estate! Savvy shoppers know that December is the best time of the year to buy property for a number o...

Huge hidden costs in home selling revealed

Nationwide, US homeowners could spend up to $15,190 in hidden costs when selling their home, according to a new analysis from Zillow and local services marketplace Thumbtack.These hidden costs could come as a surprise, as 63% of today’s sellers are selling their homes for the first time.Home improvements“Mo...

FHA Cuts Mortgage Loan Limits for Las Vegas!

Urgent FHA Bulletin! On Friday December 6th HUD announced the new FHA loan limits for 2014 (Mortgagee Letter 2013-43) across the nation. For Clark County, the current single family loan limit of $400,000 has been reduced by more than 28% to $287,500 effective January 1, 2014.  This move is not unexpected - the FHA loa...

Owner Will Carry on Brand New Condos!

Unfortunately as of February 14, 2013, this promotion has been discontinued. Credit is NOT an issue! The developer of The Modern, luxury loft condominium residences, is currently offering a fantastic incentive for buyers. With just 10% down, they can purchase a spectacular brand new condo residence with state-of-the-...

Leave a Comment

Have a Question?

Contact Us

Follow Us