Throughout 2014, the real estate market continually proved that it was no hospitable environment for first-time home buyers, more notably millennial home buyers. With rents rising and mortgage rates falling, however, 2015 is already looking welcoming to all types of home buyer, first-times not excluded.
Here are a few housing trends that first-time home buyers can expect to work out in their favor in 2015:
Lighter lending standards
One of the most complicated aspects of purchasing a home is the mortgage application process. Previously, tighter lending standards that required higher down payments and higher credit scores were putting the pressure on a demographic of home buyers that are saddled with a mountain of student debt and minimal wage growth.
In early December, lending giants Fannie Mae and Freddie Mac announced an end to this trend with lighter guidelines that only required 3 percent down payments for mortgages. Coupled with a strengthening job market, first-time home buyers may be able to finally afford to put enough money aside to meet down payment requirements.
Inventory is expected to rise
With so many millennials left out of the market, home builders who are finally feeling the confidence to build again are targeting this powerful demographic. In cities such as Washington, DC, where there is a substantial population of young professionals, the increased inventory has come in the form of condos. Builders have been ramping up condo construction throughout the city and surrounding metropolitan areas, attempting to appease a hungry and empowered buyer base.
Among the many reasons this demographic is being targeted for mass condo construction is the large availability of amenities and a lesser sense of responsibility that comes with condo ownership as opposed to single-family home ownership. This appeals to young, jet-setting professionals who spend time working and playing in one of the country’s most vibrant cities.
Homes are expected to become more affordable
With the increase of inventory, home price gains are expected to regulate substantially in 2015. While many builders were held up by a lack of confidence in the real estate market there was a slow pace of construction that held many buyers back. This lagging inventory coupled with high demand has driven home prices way up in markets across the country, including Washington, DC. With construction now amping up and and opportunities for home owners to trade up for bigger and better homes, home prices are likely to regulate with increased activity on the market.
For first-time home buyers, the condo market is especially attractive as single-family home prices have skyrocketed over the last two years. Condo prices aren’t subjected to the irrational whims that the rest of the market is forced to weather and have thus remained in reach for home owners looking to downsize or first-timers wanting to make that ultimate investment in a home.
If you are interested in Washington, DC condos for sale, please contact me today. I’d love to help you find the home of your dreams in this great region.
http://www.thecondohub.com/blog/2015-year-first-time-home-buyers
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