Recently there was a downturn in existing home sales. Some are speculating that this is a result of fewer individual cash investors. However, this can easily be a great entry point for other buyers, according to the National Association of Realtors.
Cash sales hit an all time low since December 2009, when they fell 6% this summer- from 29% in July, to 23%in August. This being said, market activity is still consistent. Realtors report that most of the losses were found in the South and West regions, while the Midwest and Northeast stayed strong.
Many are familiar with the bidding wars that have existed in the past. The cash investors were big participants in these wars and often the winners. Now, with the decrease in their participation, there is a new opening for first time homebuyers to make their home purchasing dreams a reality.
Since July the sales to young families increased by almost 3 percent. In addition, it increased close to 0.5 percent over the previous August. So, together since October 2013 this makes up the first year after year growth. And, as young families continue purchasing homes it will help the level of activity in the overall market.
The above being said, it’s still clear that limited salary increases and/or bonuses coupled with the lending standards that continue to be quite tight, are causing some to hold off on purchasing.
It’s common for a large percentage of millennials to have a good bit of student debt that keeps them hesitant about homeownership. But, with some helpful student loan modifications and steady increases in employment rates, the rate of home purchases can be consistent and even increase, especially through young families becoming more active purchasers.
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