For some time now, buying your first home
Not because you weren’t ready.
Not because you weren’t trying.
But because every time you ran the numbers, they didn’t work.
That’s why so many first-time buyers stepped back.
But after years of sitting on the outside looking in, this Spring could present new opportunities for some buyers – especially in certain markets.
Metros Where Buyers May Have an Easier Time Breaking into the Market
According to Zillow, a list of the top 50 metros for first-time buyers this Spring. And here’s a quick snapshot of the top 10 (see chart below):
According to Zillow, in these top-ranked markets, median-income households may be able to afford 68% of all homes for sale, based on Zillow estimates and assumptions that may not apply to all borrowers.
Not long ago, it felt like you could barely afford anything.
Now, you may actually have some options again.
That doesn’t mean every home is suddenly going to fit your budget. But it does mean the door that felt closed for so many buyers is starting to crack back open. And in a number of cities, first-time buyers may finally be getting a shot at buying, depending on individual circumstances and market conditions.
These cities are rising to the top not because of any one big change, but from a few smaller ones finally lining up. As Orphe Divounguy, Senior Economist at Zillow, explains:
“First-time buyers are finally seeing some light at the end of the tunnel. Affordability is still a challenge, but rising incomes, stabilizing prices and improving inventory are creating real opportunities in parts of the country. In the strongest markets for first-time buyers, they'll find more choices, less competition and a clearer path to homeownership than they've had in years.”
Basically, three big things are working in your favor:
More homes are hitting the market. According to Realtor.com says inventory is up 8.1% compared to last year. That gives you more choices, and may reduce competition in some markets, though availability and pricing will vary.
Price growth is moderating, so homes aren’t moving further out of reach as quickly. In some markets pricing may be stabilizing, but trends can vary and are subject to change.
Incomes are rising. If you make more money, that can offset some of the affordability challenges too. Income trends may help offset affordability challenges for some buyers, but this will vary by individual circumstances.
And even though mortgage rates have been higher lately, that combination can still make a difference. As Mark Fleming, Chief Economist at First American, explains:
“Income growth has outpaced house price growth for 19 straight months, boosting house-buying power even as mortgage rates remain elevated.”
But what if your city didn’t make the top 10 list, or even the top 50 markets? Here’s what you really need to remember.
There’s going to be opportunities in every market, if you know where to look.
Even in the same city, two buyers can have completely different experiences. And a big part of that is who they choose as their partner. A knowledgeable real estate agent may help identify potential opportunities in different areas. That could mean:
A neighborhood where prices haven’t climbed as quickly
A part of town with more inventory, or
A new build community offering incentives so builders can sell their inventory
So, even if your city didn’t make the list, that’s okay. There’s still an opening for you, you just need your agent to help you find it.
For a long time, first-time buyers have felt stuck, waiting for their turn to buy. But for some buyers, this Spring might be the first time in a while where things start to feel more within reach again.
Want to find the loan options that may be available to you based on your financial situation? Connect with a First Federal Bank Loan Officer today.
