The housing market experienced a sharp decline starting in 2007 that destroyed approximately $6 trillion in household wealth. Since what has been described as the bursting of the real estate bubble, many Americans are understandably reluctant to invest in a home, especially first-time house buyers. Here are some facts to help curb that anxiety and some tips for homebuyers looking to avoid the ill effects of another bubble burst.
The State of the Housing Market
Since the bubble burst, many Americans may be happily surprised to learn how quickly the real estate industry strengthened itself. The recent rebuilding of the real estate market is due in large part to a growing economy, pent-up demand, competitive mortgage rates, and affordable homes for sale. In light of these factors, Forbes estimates that there will need to be an additional 1.5 million new housing units built every year just to accommodate the population growth. In addition, the Association of Real Estate License Law Officials (ARELLO) estimates that the current 2 million real estate licenses in the United States will have to increase in order to keep up with these demands.
Tips for First-Time Home Buyers
One out of every three home buyers that purchased a home in 2014 were first-time buyers. Buying a home is an achievement, but it can be a very intimidating one for those who have never taken out a mortgage loan, had to worry about equity, or ever had to manage a property. First time home buyers ought to ensure that they have established good credit through auto loans and credit cards; this can help an individual receive better interest rates on mortgages through lenders. In many cases, placing a substantial down-payment on a house can go a long way to countering a lack of established credit. Banks have become notorious for offering high-risk mortgages; once you feel comfortable that you can keep up with the payments, be sure to lock in the mortgage rate to avoid surprises. Remember, if you can just barely afford a home, chances are you won’t be able to.
Tips for Last-Time Home Buyers
In most cases, a person’s first home may not be their forever home. It takes time to raise the kind of money needed for idealized beach real estate and similar properties. Retirees compose a large percentage of those who are able to afford beautiful beach real estate; to this end many purchase condominiums. Unlike a traditional house, a condo is where the individual owns the interior of the property but the exterior is owned by a homeowners association — this means that those who buy condos do not have to worry about landscaping and exterior maintenance costs. Believe it or not, there are some who enjoy yard work — in this respect, townhouses are typical beach real estate. Unlike condominiums, townhomes are owned by the buyer entirely; unlike condominiums, townhomes share bits of property that are maintained by a homeowners association. Whether looking for a traditional house, a condominium, or a townhouse, there is nothing quite like beach real estate for the last home anyone could ever hope to buy.