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HomeLIFE STYLEREAL ESTATE92% of millennial homebuyers believe inflation has affected their plans

92% of millennial homebuyers believe inflation has affected their plans


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It It is not surprising that 92% of millennials intending to buy a home this year stated in a survey that they have already made that decision. Inflation Their goal has been achieved.

Yet According to a survey, the majority of them don’t let it become a problem. The survey was taken from Real Estate WitchReal estate data company owns the education platform -. Clever.

While 28% of millennials delay their purchasing plans. The rest say they are responding by spending more (59%), saving more (36%), spending more than anticipated (36%), buying a fixer upper (26%), and buying smaller homes (25%). 

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Millennials — who are roughly ages 27 to 42 — are in their prime homebuying years. The According to the The Average First-Time Buyer, the average age of a buyer is 36 in 2022. This is an increase from 33 in 2021. National Association Of Realtors. 

Last An increase of 26% in home sales for first-time buyers was seen this year, compared to 34% in 2021. The Many buyers face affordability problems due to the double-digit price increases year-over-year for most of 2022, as well as rising mortgage rates.

Home Prices continue to fall from their highs

HoweverAs home prices continue to fall, the situation is slowly improving. The The median price of an existing house was $366,000. DecemberOnly 2.3% more than last year and lower than $370,700 in NovemberAccording to the association of realtors, it is. Last June, the median price was $416,000 — 13.4% higher than in June 2021.

AdditionallyThe interest rates for mortgages have fallen in recent years. The As of 6.21%, the average 30-year fixed rate loan was at 6.21% Jan. 24 according to Mortgage News Daily. That Compares to 7.32% in late October. As Buyers know that the higher their monthly payment, the higher the rate.

Mortgage rates may now be 5% to 6% as the new normal

While it’s impossible to predict where rates will be as the year progresses, experts say buyers shouldn’t wait around for mortgage rates to drop to where they were in 2020 and 2021 — below 3% or not much over it — because it’s unlikely to be seen again any time soon.

Rates Due to emergency actions taken in the aftermath of Hurricane Ike, they were so low Federal Reserve To support the economy following the 2020 pandemic.

“Those were unusual circumstances,” Lawrence YunChief economist at the National Association Of Realtors.

“Buyers should have the mindset that the new normal is a rate of 5% or 6%,” Yun said. 

Houses Are still selling quickly

One Buyers may be facing a headwind because they have limited options.

As of last month, there was a 2.9-month supply of homes — meaning at the current sales pace, that’s how long it would take to sell all listed houses if no more came on the market. That’s It is now 3.3 months. November But it is up to 1.7 months in December 2021. A supply of sufficient quantity is necessary for a market to be balanced. Four to five MonthsAccording to Redfin. 

“There’s not that much inventory in the marketplace,” Yun said.

“Even with the housing slowdown, days on the market are still less than a month,” He stated. “That implies that people in the market to buy are finding a listing they want and snatching it up quickly.”

Homes A longer time on the market could be a buying chance

If If you are looking for a seller who is more willing to negotiate a lower price, it might be worth searching for homes that have been around longer.

“There’s usually a lot of competition for new listings,” He stated. “If you find a home that’s been on the market for at least a month or two, it’s a great opportunity… sometimes sellers will take 10% to 15% off the list price.”

AdditionallyBe aware that sellers are less likely to be able to sell. go under contract with a contingency — i.e., making the final sale contingent upon, say, a home inspection — that dynamic has largely changed.

“Waiving the appraisal and waiving of inspections really walked hand in hand with low interest rates,” Stephen RinaldiPresident and founder of Rinaldi Group, a mortgage broker located near Philadelphia.

Except For those in premium areas, sellers will usually allow contingencies.

Stephen Rinaldi

President Founder of Rinaldi Group

“Except for in premium areas, in most cases sellers are back to allowing contingencies,” Rinaldi said.

 AlsoIt may be worth looking beyond the city if you are interested in homes within a certain radius. Yun said.

“There are always more affordable houses further out,” He stated. “And those homes tend to stay on the market for a longer period.”

An An adjustable rate mortgage might be an option

It You might also consider an ahref=””>adjustable Rate mortgage If you are trying to reduce the cost of your purchase, Yun said.

With An ARM’s appeal lies in its lower initial rate than traditional fixed rate mortgages. That rate is fixed for a set amount of time — say, seven years — and then it adjusts up, down or remains the same, depending on where interest rates are at the time.

“Usually the first home isn’t owned for a long period, usually it’s five or seven or 10 years,” Yun said. “So with that in mind, an ARM might make more sense because it offers a lower rate and by the time it’s set to adjust, it’s time to sell the house.”

While Experts recommend that you make sure that the maximum rate is not subject to change. 

You You may be able find an ARM with an introductory rate that is less than fixed rates. Rinaldi said.

“I think it’s worth evaluating, depending on the person’s situation,” He stated.

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