top of page

Blog

  • jacksoncho

Tips for First Home Buyers



In 2022, the proportion of first home buyers among all homebuyers dropped below 30%, compared to the average of 40% from 2011 to 2022. Factors such as rising home prices, insufficient supply, and high interest rates have contributed to this trend. In this situation, here are some potentially helpful pieces of information for first home buyers:




Firstly, a major obstacle for first home buyers is the burden of the down payment. With increased interest rates and higher home prices, monthly mortgage payments for a desired home are likely higher than in the previous years. One effective way to reduce these payments is to increase the down payment amount. While this may seem more burdensome, exploring first home buyer programs can help alleviate the financial pressure. Most localities offer such programs, and in Illinois, the IHDA program is a notable example. You can easily explore available programs by visiting Down Payment Resource (downpaymentresource.com) and entering your specific situation to receive a list of potential programs.



Secondly, it's important to note that the overall market conditions may not favor buyers. As mentioned earlier, the proportion of first home buyers has decreased in the current real estate market. Considering that the average age of first home buyers in the United States is around 32 to 33 years, which corresponds to the Millennial generation, the current lower-than-average proportion suggests that a significant number of Millennials are facing challenges in buying or choosing not to buy homes. While some Millennials may choose not to purchase homes, the majority will likely enter the market eventually. The intersection of this delayed demand with the typical annual demand may lead to increased competition and potentially higher prices.



Thirdly, it is advisable not to limit oneself to single-family homes and to consider exploring condos or townhomes. While homeownership is generally recommended for long-term investment, the high costs associated with single-family homes, such as property taxes and purchase prices, can be burdensome. Starting with a smaller property like a condo or townhome can be a less overwhelming option for first home buyers. These properties often come with external management provided by homeowner associations (HOAs), making them more advantageous for those with limited experience in homeownership.



Today, I shared information that may be helpful for first home buyers. If you have any questions about the content, please feel free to contact me. I'll be happy to provide more helpful information in future posts.





3 views0 comments

Recent Posts

See All
bottom of page