Although the residential real estate market has been on a gradual recovery, some reports are asking whether young people are buying. Last month, the Boston Globe reported a decline in the rates of young people owning a home in Massachusetts. The report said there was a 20 percent decline in a five year span from 2005 to 2010, but some local realtors are saying they are not seeing that trend. One realtor said low inventory not a low interest might explain the statewide trend. The mortgage crisis of the past four years has made it tougher for some to qualify for a traditional loan, but FHA loans are on the rise.
And of course, anyone coming back from a recent job loss or forced short sale might have difficulty qualifying for a mortgage. The current low prices can offset some of these challenges and keep potential buyers interested. The low prices might encourage young professionals and couples interested in starting a family to aspire to the long-held American dream of homeownership. Other factors that come into play to encourage residential real estate transactions include retirement and the need to downsize, a divorce, employment relocation and growing families needing to upsize.
The economic times might change, but some things stay the same, said one realtor. Today’s younger buyers are doing their research and analyzing their options before purchasing a home. Perhaps the reasons are the low prices and the low mortgage interest rates are offering more options to go big rather than start with something small like a condominium. Young people can afford more home than they could just five years ago. Plus they may understand the need to stay in their first home longer than previously thought.
The Warren Group recently reported Massachusetts home sales were up 35 percent in May, even though the price of homes was stagnating or dropping, in some cases. Northeastern Massachusetts has seen a continual increase in sales over the past 12 months, with many of the buyers being young people. Finding mortgage financing in today’s residential real estate market may be rather tricky for some buyers. A real estate attorney can help young buyers navigate the state and federal mortgage options to ensure the best possible loan for their new home.
Source: North Andover Patch, “Local Real Estate: Are Young People Buying,” Brain McGonigle, July 12, 2012