Unless you have not been tuned into the current housing market at all, you are probably aware that we are in a very competitive and tough real estate market for home purchasing at the moment. Real Estate experts and economists lovingly refer to this phenomenon as a “Seller’s Market”, meaning that there are not as many sellers as buyers, so sellers are able to get top dollar for their home. Scarcity breeds aggressive offers. For many first-time home buyers who are already a bit intimidated about their first large investment as well as the process in general, this combination breeds fear. These millennials’ parents remember buying their first home as a COMPLETELY different process and the results of that are becoming glaringly apparent in recent studies.
One of the biggest and most telling differences lies in the average home buyer age. Where, in the past, the average home buyer was between 20 and 25, the current age of the average home buyer is now a whopping 32 - a record high! Several characteristics of first-time home buyers help this age make more sense. The typical first-time home buyer is better educated than their counter parts in previous generations. Education takes time! Rather than completing school at 18, or even 21, more people are attending graduate school or attaining doctorates. These people are also MORE likely to take a year or a few years off in between degrees to try and save money or build up their resume. With higher education comes higher expense as well. 41% of first-time homebuyers have, on average, $29,000 in student debt. The younger the person, the more likely their student debt is actually greater than $29,000. Student debt also affects the person’s ability to even qualify for a loan. Lenders take a look at your debt-to-income ratio, and student debt has been known to through a wrench or two into that perilous balance.
If you are curious about where to start the process of buying your first home, give a knowledgeable, local Realtor a call. A trusted professional can help guide you through the often complicated process and make educated decisions!