Skip to main content

They're Ready, But Do They Know? (Posted January 25, 2016)

The National Association of Realtors – you may have heard of them – recently conducted a survey of renters who are 34 years of age or younger.  Nearly all of those questioned say they want to own a home in the future.  The NAR titled the survey Housing Opportunities and Market Experience – you read that right: HOME (points to their marketing department) – and it was designed to track topical real estate trends by asking consumers about two major topics: (1) whether or not it’s a good time to buy or sell a home, and (2) what are their expectations and experiences in the market.  “Despite entering the workforce during or immediately after the worst of the financial and housing crisis, the desire to become a homeowner appears to be a personal goal for a convincing majority of young renters,” says NAR Chief Economist Lawrence Yun.  The market conditions, according to Mr. Yun, are creating a “sizeable, pent-up demand for buying.” 

According to the same survey, over half of renters who earn $50,000 or more annually have not tried but feel confident that they could succeed in obtaining a mortgage.  Without a doubt, $50,000 is a sizable chunk of money, but here’s a bit of perspective: according to the Bureau of Labor Statistics, the median salary for women age 25-24 is $35,620; the median salary for men in the same age group is $40,560.  Now, remember: “median” means the exact middle of a group.  In this case of the information shared by the Bureau of Labor Statistics, this means that if you have 100,000 women between the age of 25 and 34, 50,000 of them make MORE than $35,000 – that’s A LOT of people who are confident that they could succeed in obtaining a mortgage.  Now, there’s a second but closely related factor that needs to be considered. 

Many people significantly lack a fundamental understanding about home-financing qualification criteria – this is especially true for renters who plan to buy a home within the next five years, according to a survey conducted by Fannie Mae’s Economic & Strategic Research Group.  For example, many respondents thought the minimum down payment was 12% when Fannie Mae’s actual figure is 3%.  As for minimum credit scores, many thought the requirement was above 650 for Fannie Mae – it’s actually a 620.  We can go even lower than that, too!

Fannie Mae’s vice president of Applied Economic and Housing Research (what is it with these really long titles?), Mark Palim, observes, “Advancing from aspiration to sustainable home ownership is more likely to occur if consumers have an accurate understanding of the requirements to qualify for a home loan.”  Thanks for that analysis, Captain Obvious!

All kidding aside, what are YOU doing to reach out to and let this new generation of buyers know homeownership is within their reach?  We have some proven and successful ways to help – give us a call!

Comments

Post a Comment

Popular posts from this blog

The Definition of Insanity (in Real Estate)

More than a couple of years ago, I witnessed something that makes me laugh and cringe at the same time.  Having lunch at a local restaurant, I spied a real estate agent and a loan originator having what I would characterize as a “first date”. I couldn’t help but overhear little snippets of their conversation, and as far as I could tell, things were going relatively well . . . at least until the agent asked the LO this question: “So, do you like to sit at open houses with agents?”  I immediately looked to the LO’s face awaiting the response.  I didn’t need to hear another single word coming out of the LO’s mouth because his face said everything:  you would have thought the agent had asked him if he enjoyed bobbing for apples in a pool of acid judging by the look on his face.  While his face was communicating complete revulsion, his lips said, “Yes, of course.”  And that’s when I looked over at the agent’s face to see, ...
Post a Comment
Read more

Change: the Only Sure Thing

Which headline is better for grabbing your attention and prompting you to read the article to which it’s attached: “Credit Reports to Exclude Certain Negative Information, But Read on to See if This Even Applies to You” or “ Credit Reports to Exclude Certain Negative Information, Boosting FICO Scores”?   Obviously, the former is less than tantalizing while the latter makes you say, “Tell me more!”   I was in the “tell me more” camp, and the folks at The Wall Street Journal sucked me into their vortex. The development, set to go into practice on July 1 st , is certainly a departure from how the Big Three (Experian, TransUnion , and Equifax) have done things in the past, but it’s not going to wave a magic wand and make bankruptcies, foreclosures, short sales, etc., go away.   It’s sort of a bittersweet development.   Let me explain: Many tax liens and civil judgments will be removed from people’s credit reports if they don’t include a complete list of a...
Post a Comment
Read more

The Naked Truth About Home Buying

It’s highly likely I’ve already written about this, but I’ll try to make it entertaining at least.   There’s a guy who works in ou r office who suffers from kidney stones – and from what he’s described, “suffers” might even be a little too tame a word for it.   As an aside, though, when you ask him how painful the experience is, he gets an odd smile and says, “It’s the most intense pain I’ve ever experienced, but it’s hard to describe.   I’ve heard a lot of people compare it to the pain a woman experiences while giving birth.   To that, I must say, those people are big, fat liars!   I’ve been in the presence of a woman giving birth, twice, and her pain has to be 100 times worse.   They’re passing the equivalent of a Buick.   I’m passing a pumpkin seed.”   He’s always been a colorful fellow. He’s had this wonderful condition for over a decade now, and the stones make their appearance about every 18 months or so.   Up until recently, ...
Post a Comment
Read more