First Time Buyers Will Be Back With A Vengeance in 2015

Predicate: We're presuming home mortgage rates will stay reasonably static in 2015. If that doesn't happen the author will be wiping the shoe polish off his upper lip by Labor Day. 

In 2014 first time home buyers were the smallest percentage of the housing market they had been in a number of years. While 2014 was a good year it also had it's holes. Holes in price points and geographies that hurt home sellers in some instances. Billionaire Mark Cuban has been screaming about student load debt and it's affect on our overall economy (like first time home buyers) for over two years. If a young adult is 60k in student loan debt, underemployed which many are, they are not saving for a down payment on a home. I believe we saw some of the result of that last year with the irregularities in the real estate economy. 

In the new year it seems the tide may be turning. More single digit down payment mortgages and the severe slide in gas prices could become a powerful force in this year's housing market. While not everyone agrees single digit down loans are a good thing, they are out there none the less and will be a player in home sales. 

Whenever I say lower gas prices will help housing people usually look at me with a glazed over 'what are you talking about' look. It's actually pretty simple. First time home buyers are essential to drive the market. In our area if you don't have people buying at $170,000 those owners can't move up to $395K. The $395K sellers can't go to $550,000 and so on. So what does gas pricing have to do with it? Put an extra $100 a month in the pockets of potential first time home buyers, give them a happy feeling about how low gas is, add it to the single digit down loans are you have the potential to put a LOT more first time buyers in the market. That could drive all price points in 2015. It could make some price points inventory deficient and make many home sellers very happy as we head for Spring. Already in our market there's been an activity level that we have not seen in several years which is welcome news after the horrific weather driven problems of the Q1 2014. If you're weighing whether to test the waters this year it will be an fast paced overall experience for many. If you do decide to wade in....do your homework....get good guidance and be prepared to make fast decisions if you hope to accomplish the goal of a new home in 2015.  

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