First-time buyers in today’s housing market face a unique scenario. While the stabilization of the market means safer buying practices when compared to the years ahead of the Great Recession, they also have the very real factor of decreased housing inventory in the lower price brackets. This means anyone looking to buy their first home face significant competition for the home the desire, or worse, fewer options that fit their “dream home” criteria.
Decreased Housing Inventory
The lack of housing inventory is related to many factors, including less older Americans selling their homes over the last few years, the most relevant factor for first-time buyers is the drop-off in 2010 of new construction homes. When the bubble burst in 2008, and the inflated house values fell off almost overnight, it led to significant foreclosures and abandoned housing projects. General contractors and home builders took a huge hit, and many companies put the brakes on their home-building efforts as they tried to regain some of their lost income.
New Homes Buyers
So, what is a new home buyer to do as you plan to begin your home search facing these obstacles?
1. Get your credit healthy. One of the most controllable factors in the mortgage application process, many people don’t know what their credit score is or what they can do to improve it. Especially for first-time home buyers, getting your credit score as high as possible before you apply for a mortgage loan ensures you the best potential to be approved for the home you seek. Tools like CreditKarma.com offer credit tracking tools, and tips to clean up your credit report so you can be approved for the best mortgage rates and highest home values.
a. Tip: It can take a few months to get your credit report in good shape – take the time and steps necessary asap.
2. Find out about your local housing market. Every region has their own challenges, opportunities and trends, and that goes for the area you are looking to buy a home as well. Do research on local real estate companies and mortgage partners and connect with the experts in your area so you get the most accurate recon on the homes available, buying and selling trends and the steps you need to make your dream home a reality.