Incredible as it may seem, we've just moved past the half way mark in 2015, so it has been no surprise in the past few days to read various press reflections on the performance of the homes market so far.
Back in December, the 19th to be be precise, we were predicting that this year would mark a strong comeback for first time buyers, who had been largely absent from the market in recent times. We were right!
This week there has been a lot of press focus on the role of the first time buyer in driving a booming market for homes across the nation.
First mortgages were up no less than 80% in the first quarter of the year on the same period in 2014. A phenomenal increase by any standards. Unsurprisingly, this has resulted in the highest US sales of previously owned properties for six years - up 5.1% in May alone. The National Association of Realtors recently reported that first time purchases in May accounted for 32% of all buying activity.
It really is difficult to overstate the importance of the first time buyer in the market. Although we saw great advances last year, the one key component that was missing was truly vibrant first time demand. This is so crucial because, without first time buyers, the entire chain of home selling, right up to the highest levels, gets disrupted. Put simply, if those owners with what might be described as entry level homes struggle to sell, then they cannot upgrade and demand at each successive level in a given market starts to suffer.
So although this is wonderful news for those looking to get on the ladder, it's fantastic too for all buyers and sellers as the market is consequently far more fluid.
This renaissance is due to a confluence of a number of key current incentives:
- Mortgage rates have remained very low.
- Government low down payment home loan schemes, squarely aimed at first time buyers, have gained real traction since their initial introduction at the end of 2014.
- A better economy and much improved job prospects have added to the feel good factor and given many would be home owners the confidence to take the plunge with a home of their own.
- Rental prices, inevitably, have continued to rise and, in many instances, those who can obtain a mortgage can actually save on monthly outgoings in comparison to renting.
The word that perhaps best encompasses all of these factors is affordability. All things considered, there's rarely been a better moment to make the leap from renter to home owner. Equally, with such wonderful buyer sentiment this is a superb opportunity for all would-be sellers. Whatever your individual needs, we'd be delighted to explore your very best options with you. Call us today for an informal chat.