2015 has been called the year of the millennial buyer (people under age 35) in real estate. Economists are telling us that 46% of all buyers this year will be first timers. In the first 30 days of March, we have seen over double the amount of homes purchased between $100,000 and $200,000, a common entry-level price point.
Omaha Homes SOLD $100,000-$200,000
March (through March 30): 465
There are several factors leading to this jump. First, millennials are seeing better job opportunities and have more income. Many moved back in with their parents or have roommates after college and are ready for some space. They also have seen some student loan relief recently with the Pay As You Earn program that allows newer borrowers to cap student debt payments at 10 percent of a person’s disposable income.
Second, down payments are more affordable. We’ve seen down payments allowed at 3%, down from 3.5%. First time home buyers should look into FHA loans, and certainly the VA loan option if they have VA benefits.
Finally, interest rates are still very low, allowing more home for less money. If you were to take out $10,000 more over 30 years, it would cost you about $55/month more in your mortgage payment, assuming a rate of 3.75%.
In Omaha, we’ve seen markets balance out in most price points. In some areas of town, and at the higher price points, it’s still considered a buyer’s market; however, for many first-time buyer markets, the tables are turning. With lower inventory, some areas are moving fast and favor is shifting to the seller.
It’s important to talk to a real estate professional to understand the absorption rates of areas you’re interested in. A complete analysis will help with your negotiations and making sure your outcome is the best for your situation.
Please call us if you have any questions or are interested in starting your home search! We are happy to help.