First-Time Dwelling Patrons Battle – The New York Instances

0
703
First-Time Home Buyers Struggle - The New York Times

The breakneck home market has frustrated buyers across the country, with many making multiple bids only to be outbid again and again. Low inventory levels, high prices and intense competition are a challenge for any buyer, but first-time buyers face the toughest hurdles.

Your problems finding a home are not solely defined by this savage pandemic market. First-time buyers have built-in challenges. Look at their financial picture: generally younger, they lack a deep credit history, which could result in a lower credit score. Their employment history is shorter and their income is usually lower than that of older, more established bidders. Newcomers also had less time to save for a deposit and an emergency fund. All of this makes them less competitive in bidding wars, less likely to get credit, and less attractive to sellers.

The pandemic has exacerbated these challenges, according to NerdWallet's First-Time Home Buyer Metro Affordability Report, which examined the market situation for this cohort in the 50 largest US cities in the second quarter of 2021.

During that period, the number of available listings in these 50 cities actually improved 2 percent from the first quarter, but declined 5 percent nationwide. In the years leading up to the pandemic, larger price increases in the first to second quarters were the norm. (In 2018 they had increased by 10 percent, in 2019 by 6 percent.) A better comparison could be compared to the previous year: Measured in this way, the inventory in the second quarter decreased by 48 percent compared to the second quarter of 2020.

But it's rising prices (the result of shrinking supply and increasing competition) that really hurt beginners. A general formula for determining affordability multiplies income by three – so if you make $ 100,000, you can likely qualify to buy a $ 300,000 home. In the 50 cities surveyed, however, list prices averaged 5.5 times the local median income of first-time buyers, making most homes unreachable.

This week's chart, using data from NerdWallet's study, shows the 10 cheapest and 10 least affordable cities for first time buyers among those 50 cities, ranked by affordability ratio in each city.

LEAVE A REPLY

Please enter your comment!
Please enter your name here