NORTHAMPTON, Mass. (WWLP) – Listen up millennials, if you want to buy a home within the next few years, there’s important steps you need to take now.
We all have an idea of our dream home, but fewer people are putting the cash down to buy their first one. First time home-buyers made up only 35% of house sales in Massachusetts last year; the lowest it’s been in 13 years.
The Murphy’s Realtors in Northampton say there are reasons for this trend. “Many young people, they’ve got school debt, they’ve got car debt, and there are things that chip away at how much they can pay a month for a loan,” said realtor David Murphy.
The average first-time home buyer in Massachusetts is 33 years-old, single, and has a median income of $82,000. 97% finance their home. The lending crisis in 2008 made it harder to get a loan, and now buyers need larger down payments.
The biggest problem first time home buyers run into is getting their finances in order. A lot of millennials like to run up their credit card, which is the last thing you want to be doing right now. “We see people who will go out and start looking for a home,” said Murphy, “and they’ll find a home, and then they’ll go out and buy a new car right in the middle of it.”
If you’re preparing to buy your first home:
- Save money now and make sure your credit score is good.
- Pay off any debt as quickly as you can.
- Have a financial professional determine what you can realistically afford. 91% of residents across Massachusetts consulted a real estate broker when buying a home in 2017. Even if you’re not ready to buy a home, it’s never too early to speak with someone about what you could afford in the future.
- If it’s not perfect, don’t be afraid invest in and possibly “flip” a property if you can find a really god deal.
- Keep an eye on the market.
- Understand that you may have to make compromises to have your ideal house, like where it’s located and how far your commute is.