In recognition of American Housing Month, the American Bankers Association Foundation today released an infographic outlining five tips for how home buyers can overcome challenging market conditions and make their dream of homeownership a reality.
The infographic acknowledges that limited housing inventory, supply chain disruptions that have delayed new home construction, rising interest rates and the increased presence of institutional investors in the market have presented challenges for those looking to purchase a home.
In addition, the median sales price for a single-family home in the first quarter of 2022 was $428,700, up 16% from the first quarter of 2021, according to data from the St. Louis Federal Reserve.
“With high demand and low supply, many prospective home buyers are finding themselves priced out of their desired neighborhoods,” said Sam Kunjukunju, senior director, ABA Foundation. “Though market conditions may be challenging, consumers can take important steps today to ensure they are ready to buy a home in the future. With preparation and a little resilience, homeownership remains an important and achievable goal.”
The ABA Foundation infographic offers the following tips for prospective home buyers:
- Gain speed with bank lenders. Get pre-approved for a loan to allow you to quickly and effectively bid for your dream home.
- Fix financial flaws. Clean up your credit and pay down your debt. If you address problems early, you will be more likely to qualify for a better interest rate.
- Build your savings. Down payments for first time homebuyers generally range between 6-7% on average, according to the National Association for Realtors. (National Association of Realtors). However, offering a larger down payment helps you build equity faster, reduce monthly payments and eliminates the need for private mortgage insurance.
- Understand your local market. Once you know what you’re looking for, research what similar homes have sold for in the past six months.
- Set a realistic budget and stick to it. Consider what you absolutely need in a future home and where you can make concessions.
To view the full infographic, click here.