If you’ve been following the 2014 Real Estate market you know that just about every Realtor will tell you that it’s been a great time to buy a home.
The reality is that more potential first time home buyers are choosing to continue renting in Portland and across the United States instead of buying.
Why First Time Home Buyers Are Renting
Although the potential first time home buyer is one of the most heavily marketed to groups in the United States, the reality is that most potential first time home buyers are choosing to hold off on buying homes nationwide for the following reasons:
- Price Range
- Low Inventory
- Tight Credit
- Difficulty saving for the 20% down payment
Besides the obvious reasons why these potential first time home buyers are choosing to hold off on buying homes, they also are stepping back from buying since they know that buying a home is expensive. They’ve taken the time to do the math to calculate how much home they are really getting when they buy.
Big Drop from One Year Ago
Last year was a great year for many first time home buyers because home prices were still affordable.
In 2014, the Real Estate market has changed because when you combine rising home prices with higher mortgage interest rates, we’ve seen first time home buyer activity drop by as much as 33%.
It’s not just the increase in home prices that’s made it difficult for many first time home buyers.
Since 2008 we’ve seen a very small growth in wages (0.5% or less in most markets) and this has also made it difficult for first time home buyers to get their finances ready to allow them to buy a home.
What Does This Mean For Income Property Owners Like You?
It’s a great time to continue renting out a single family home because there’s a greater demand for rentals now than ever before.