According to the latest Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers made their home purchases with down payments of less than 6% between October 2016 and November 2017. This challenges the common belief that a 20% down payment is necessary to buy a home, leading many potential buyers to disqualify themselves without even trying.
The Median Down Payment
In 2017, the median down payment for all buyers was just 10%. For first-time buyers, this amount drops even further to just 6%.
Why Is This Important?
Many buyers are unaware of the low-down-payment options available to them, often assuming they need a larger amount. This misconception can prevent first-time buyers from pursuing homeownership, even though low-down-payment mortgage options make homeownership more accessible.
Why Are First-Time Buyers Still in Demand?
Zillow Senior Economist Aaron Terrazas recently highlighted why buyer demand has remained strong:
“Looking into 2018, rent is expected to continue gaining. More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead.”
With rising rents, many renters are choosing to make the switch to homeownership. For first-time buyers, this means securing a low-down-payment mortgage to lock in a stable monthly housing payment, away from the unpredictability of rental costs.
Bottom Line
If you’re a first-time buyer unsure whether you qualify for a low-down-payment mortgage, let’s talk! We can help set you on the path to homeownership and find a mortgage solution that works for you.
Disclaimer
The information contained in this article is not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee the accuracy or completeness of the information or opinions contained herein. You should always conduct your own research and seek professional advice before making any investment decisions. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by reliance on the information or opinions contained herein.