For first time buyers, the struggle to afford even the cheapest of housing in the U.S. has been all too real. Between low wages, competition from veteran homeowners and investors and increasing student debt, most young professionals simply cannot fathom financing that type of investment. Now, the prospect is exceedingly difficult as sellers are expecting more cash upfront even on moderately priced properties.
According to Bloomberg BusinessWeek, the necessity for a bigger down payment is the result of tight credit limitations that are making it difficult for rookie homebuyers, even with interest rates at historical lows and home prices also low compared to this time last year.
For many individuals who are categorized ‘Generation Y’, these restrictions make it seemingly impossible to expand their financial portfolio with the acquisition of real estate. Normally, these same individuals would already be looking to invest in property, but are forced to hold back because of financial restrictions. This leads to a weakening in the foundation of the housing market and limits its growth potential in coming years.
“The numbers tell the story of why we have millions of potential homeowners who are renters or living with their parents,” said professor of real estate and finance at the University of Pennsylvania’s Wharton School in Philadelphia, Susan Wachter, in a statement to Bloomberg. “What has changed is the ability to become an owner. And that’s changed through a down payment that’s more than doubled.”
While the obstacles exist, the fact is that anyone can afford property in today’s market with the right financing. If you are interested in learning more about your options, contact Ryan Hatleli at New Penn Financial today. His team will help you determine the loans and funding that is available to you.
For more information, contact Ryan Hatleli (Branch Manager NMLS#174748) at New Penn Financial; (605) 877-3485; rhatleli@newpennfinancial.com; http://www.newpennfinancial.com/rhatltli
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