The struggle of first-time buyers - The New York Times

The fierce domestic market has frustrated buyers across the country, many submitting multiple bids to be outbid again and again. Low i...

The fierce domestic market has frustrated buyers across the country, many submitting multiple bids to be outbid again and again. Low inventory, high prices, and intense competition are a challenge for any buyer, but first-time buyers face the highest hurdles.

Their problems in finding a home are not entirely defined by this wild pandemic market. First-time buyers have built-in challenges. Consider their financial situation: Usually younger, they don’t have a significant credit history, which could mean lower credit scores. Their work history is shorter and their incomes are generally lower than that of older and more established bidders. Newbies also had less time to save for an emergency deposit and fund. All of this makes them less competitive in bidding wars, less likely to get a loan, and less attractive to sellers.

The pandemic has amplified these challenges, according to NerdWallet Metropolitan Affordability Report for First-Time Home Buyers, which examined the state of the market for this cohort in the 50 largest U.S. cities during the second quarter of 2021.

During that period, the number of available listings actually improved 2% from the first quarter in those 50 cities, but fell 5% across the country. In the pre-pandemic years, larger increases in enrollment from the first to the second trimester were the norm. (In 2018, they were up 10%; in 2019, 6%.)

But it was the rise in prices (the result of shrinking supply and increasing competition) that really hurt newbies. A general formula used to determine affordability triples income – so if you earn $ 100,000, you can probably qualify to buy a $ 300,000 home. But in the 50 cities studied, list prices were, on average, 5.5 times the local median income of first-time buyers, leaving most homes out of reach.

This week’s chart, using data from NerdWallet’s study, shows the 10 most affordable and 10 least affordable cities for first-time shoppers among those 50 cities, ranked using the accessibility ratio in each. city.

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Newsrust - US Top News: The struggle of first-time buyers - The New York Times
The struggle of first-time buyers - The New York Times
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