First time Vero Beach homebuyers seem to be disappearing right before our eyes. The same is true nationwide, as the percentage of homes that were sold to first-time homebuyers dropped to 33% this year, the lowest percentage in almost three decades.
This drop in first time Vero Beach homebuyers is despite the fact that mortgage rates are hovering near record lows and home prices are still off about 15% compared to the housing boom peak, according to the S&P/Case-Shiller 20-city home price index.
Young adults, who make up the lion's share of first time Vero Beach homebuyers, want to own. According to a Zillow survey released in October, respondents ages 23 to 34 were, in fact, very bullish on home buying, with 83% of young renters expecting to buy a home someday.
First Time Vero Beach Homebuyers Want to Purchase a Home
The problem is not desire. Blame it on heavy student debt loads and incomes that aren't keeping up with rising home prices. Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the workforce.
Strict lending standards have also made it more challenging for Millennials to qualify for mortgages, especially since many are carrying thousands of dollars in student loan debt. This has also added costs to mortgage borrowing for many young buyers. With limited credit histories, they usually have lower credit scores and lack the funds to make large down payments.
Vero Beach homebuyers using low down payment FHA loans, for example, pay about $50 more a month for mortgage insurance on loans of $100,000. And borrowers with 640 credit scores getting Fannie Mae- or Freddie Mac-backed loans pay fees that are three percentage points higher than borrowers with 740 credit scores.
Get more timely information for Vero Beach homebuyers in our section on Vero Beach Homebuyer Tips to the right under Vero Beach Real Estate Categories.
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