A shortage of homes for sale and rising home prices are making it challenging for first-time buyers, in particular, this spring. For those who want to land a home, real estate professionals are urging them to move fast.
The price of an existing home in March was about $250,000, up nearly 6 percent from a year ago, according to the National Association of REALTORS®. Homes are selling faster too, often under contract in about a month.
“The starter house is nearly missing in some markets,” says Jessica Lautz, NAR’s director of survey research and communication.
In Colorado Springs, Colo., real estate pro Jay Gupta says the imbalance between the supply of homes and demand is “unprecedented” and many buyers are being priced out of some areas. Homes that are selling for less than $225,000 are hard to find, he says. Gupta told The New York Times a home listed for $310,000 in the area recently attracted 40 people to a three-hour open house. The home was soon under contract with a buyer offering $30,000 above the asking price.
To increase chances, home buyers should get preapproved for a loan and be ready to act quickly when they find a home they like, Gupta says. They’ll likely need to be less picky too. Pick two or three “must haves” and make those the priority so you can move fast when opportunities arise, Gupta suggests. “You have to be more flexible,” he adds.
Also, home buyers needn’t wait for a 20 percent down payment. More than half of first-time buyers make down payments of 6 percent or less, according to NAR data from 2017. Both Freddie Mac and Fannie Mae support home loans to eligible buyers who put down as little as 3 percent on a home purchase, as does the FHA.