Wednesday, March 15, 2017
According to a new study from Bankrate.com, California was ranked as the toughest state for home buyers.
They ranked the states by measuring:
1. housing affordability
2. the job market for young adults
3. housing market tightness
4. credit availability
5. home-ownership among the under-35 crowd
In California, the housing prices are really high. Buyers need a combination of fairly large down payment, and good credit to be able to buy easily. Rental prices are also really high, so would-be home-buyers are paying expensive rent, and not able to save for their down payments. In Hawaii, California, and Oregon, principal and interest payments consume more than 33% of the household income. However, in the most affordable states of Iowa, Ohio, and West Virginia, those payments only consume 13%!
Tight markets make it difficult for buyers, especially Millennials. There is low availability of cheaper homes, which causes bidding wars among buyers. During the recession, the entry-level lower priced homes were snapped up by investors, so there is a lack of inventory for entry-level buyers. In Hawaii, California, and New York, less than 25% of households under the age of 35 were living in owner-occupied homes. Compare this to Minnesota, Iowa, and Utah, where the under 35 owner-occupied living is more than 40%.
Luckily, mortgage rates are still very low by historical standards, currently fluctuating daily from 4% to 4.75%. This allows Millennials to purchase more expensive homes than in previous generations. First-time buyers also have access to low down payment loans, with down payments ranging from 0% to 5% down. If you are interested in your low down payment loan options, please give me a call or text at (909)446-2666 or email me at firstname.lastname@example.org. It would be my pleasure to work with you!
Real Estate Masters Group
770 E. 6th St., Suite A,
Beaumont, CA 92223