Buying a home used to be a given. After high school, you went to college and got a job. Maybe you got married. Then you smiled for the camera in front of the “sold” sign on the front lawn of your charming starter home. Today’s young people don’t necessarily have that expectation. People who are buying their first homes are earning about $7,000 more per year than they were a decade ago, demarcating a trend in which only the top 40 percent of the income bracket is able to purchase real estate. The individuals who are able to afford their first home are part of a narrower group in today’s market.
DOES THIS AFFECT THE ECONOMY?
The main concern associated with this movement is that the trend is limiting the country’s economic recovery. As fewer first-time buyers purchase homes, fewer existing homeowners upgrade to larger homes. This results in fewer home sales in general and can lower property values.
HOW THIS MOVEMENT MAY ACTUALLY BENEFIT THE HOUSING MARKET
Because lending standards are now more restrictive than they were 10 years ago, the housing market is less likely to experience a false bubble and a major collapse like it did toward the end of the last decade. The people who are buying homes today tend to be more qualified than they were in 2005.
Income isn’t the only element that lenders consider when someone is buying a home. Young people with less-than-ideal salaries can improve their qualifying criteria by increasing their credit scores. Financial responsibility is an influential factor in mortgage qualification._DSC0182

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