More first-time home shoppers say they want a house they can “grow into” not a home they can quickly grow out of.
With big housing bargains and low mortgage rates, some first-time buyers have decided to go big with their home purchase and sidestep the traditional smaller “starter house.”
A growing number of real estate professionals are reporting that childless, twentysomethings who have strong incomes are taking advantage of housing deals and looking for their dream house now, rather than wait until later.
A Minneapolis couple purchased a 3,000-square-foot-home as their first home. “The more starter homes we saw, the less impressed we became. … Since we knew we could easily afford to buy more than we were initially looking to spend, the choice was quite simple,” Joseph Simons told the Minneapolis Star-Tribune. “Why not buy a forever home with everything we want?”
Indeed, more buyers are purchasing a home with intentions to live in it longer than they once did. On average, buyers now expect to stay in their house 15 years compared with 10 years in 2010, says Walter Maloney, spokesman for the National Association of REALTORS®.
Steve Howe, a sales agent for RE/MAX Results in the Minneapolis area, says one big driver for first-time home buyers to to go big on their first home is low mortgage rates. Howe says first-time buyers worry that mortgage rates — the cost of borrowing for a home purchase — will never be this low again so they want to take advantage while they can.
“If they can lock in a $300,000 or $350,000 mortgage at 3.5 percent, that’s as good as gold,” Howe says.
Source: “First-time Buyers Skip the Starter Home,” Star Tribune (Minneapolis) (Sept. 29, 2012)