As 2022 wrapped up, buyer, sellers, and real estate professionals all have seen the housing market fluctuate with the daunting rise in interest rates, the low-inventory environment that created bidding wars, and the frenzied activity on the market. And first-time home buyers are getting hit the hardest. NAR reported in November that First-Time Buyes dropped to an all-time low of 26% from 34% just a year ago. Housing affordability has shut out many first-time buyers, coupled with rising with rental costs and interest rates and other factors like car loans, credit card debt, and student loans, making it a challenge to save for a down payment.
Small towns and rural areas like Big Rapids, MI have seen a migration from urban areas as affordability in these areas as well as family support systems and the trending ability of remote and hybrid work settings has become a new norm since the 2020 pandemic. This has made Big Rapids, MI a new prime location, even though inventory is still at a historic low. But first-time home buyers don’t need to worry—there is still hope. Even in this market, there are options and ways to prepare for homeownership.
Here are just a few tips to prepare for first-time home ownership:
- Start saving early—but don’t worry there are many options out there for those that need assistance.
- Decide how much home you can afford.
- Check and strengthen your credit.
- Explore mortgage options—don’t be afraid to research buyers’ assistance programs like FHA and USDA loans.
- Compare mortgage rates and fees—just like with anything else, shop around for the best rates and options. Mortgage brokers can be helpful in finding you competitive rates.
- Get a preapproval letter—once you have a preapproval letter, you can compare that to what you think you can afford and what a bank thinks you can afford. It also saves time form looking at homes you may not be qualified for.
- Choose a real estate agent—by finding a trustworthy and knowledgeable real estate agent can make the experience a success.
- Stick to your budget—even though a mender may say you qualify for a loan amount, make sure it is in a comfortable affordability zone FOR YOU.
- Make the most of open houses—online 3D tours and pictures are great, but virtual walkthroughs don’t let you observe the finer details. Open your senses when touring for noises like street traffic, odors and overall condition of the house both inside and out, as well as electric and plumbing upgrades, and big-ticket items like the roof.
- Looking for adequate home insurance—like a car, you will need to purchase a homebuyers insurance policy. Again, shop around and find the best rates to help save money and make sure that the policy is adequate to cover ALL of your belongings and home.
Written by Cherie Denslow-Brannan
