Married couples once again dominated the first-time homebuyer statistics last year at 66% of all buyers, according to the most recent Profile of Home Buyers & Sellers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.
Many couples are deciding to use what would otherwise be their wedding fund as a down payment on their first home, as unmarried couples made up 8% of all first-time buyers last year. If you’re single, don’t fret; you can still buy your dream home! Single women made up 17% of first-time buyers in 2016, while single men accounted for 7% of buyers.
According to a survey by the Wedding Report, the average cost of a wedding in the United States at the start of the year was $25,961, which equates to a 10% down payment on a median priced home. Process of Buying a Home
A recent article from the New York Times found that many singles are now asking their parents to allow them to use the money they’ve saved up for their wedding day to instead buy a home.
In the case of Carrie Graham, a Protestant minister from Austin, TX, her parents had saved a ‘five-figure sum’ for her wedding and were more than willing to give her that money as a down payment on her dream home. Graham told The New York Times,
“Buying the home wasn’t me saying, ‘I’m never going to get married’ or I am going to get married.’ My own home had way more than equity benefits. It was a real gift to have a home in an extremely desirable neighborhood in a city that I love. It’s brought me joy.”
More and more first-time homebuyers are finding a way to purchase their dream homes, even if that means delaying their dream weddings. Process of Buying a Home
A Home Buyer’s Guide to Saving for a Down Payment
According to builder.com, first time home buyers in the United States take nearly eight years to save for a down payment for their dream home. The time frame is derived by factoring in the amount a renter pays for housing in each state and the required 10% down payment. Under this approach, buyers in South Dakota state take around 3.5 years to save for a down payment, which is the shortest compared to other states. Process of Buying a Home
Another study by Realty Trac shows that it takes an average of 12.5 years for a new buyer in the United State to save for a 20% down payment. The study is based on a personal saving rate of 5.6% and the current home median home prices. Given that most first time home buyers are young adults with earnings below the national median salary, they would have to wait until they are 42 to afford a home. Process of Buying a Home
However, the same savings can be made within two years in the Freddie Mac and Fannie Mae 3% down payment plan. Under this program, it takes buyers in states such as North Dakota as little as one year to save for the down payment. The Freddie and Fannie plan is geared towards enabling first-time home buyers and low-income borrowers with little savings to afford the down payment. Process of Buying a Home
To qualify for this program, you’ll need a credit rating of at least 620 and offer a full documentation of their assets, income, and job status. Also, the prospective first time home buyers must participate in borrower education programs and have a private mortgage insurance plan to qualify for the loan. A buyer can take advantage of the Home Possible Advantage plan provided that the co-borrower is a new buyer. Process of Buying a Home
How a real estate agent can help? Read more…. Process of Buying a Home