SEATTLE, March 28, 2019 /PRNewswire/ -- First-time
home buyers can expect an easier home shopping experience this
spring, as market conditions shift in their favor, welcome news for
buyers who have struggled to break into the market.
Entry-leveli home values are growing at their slowest
pace since mid-2016, giving first-time home shoppers a little more
breathing room during the home search process, according to
RealEstate.com's Entry-Level Market Report. At the same time,
inventory is showing consistent positive growth, which means that
buyers will have more choices and likely face less competition when
looking for the right home.
For the past several years as the market recovered from the
housing crash, rapid home value appreciation and falling inventory
created steep competition and expensive buying environment, keeping
many first-time buyers on the sidelines. Record-high rents and not
being able to use profits from a previous home sale made coming up
with a down payment – the biggest hurdle for renters wanting to
become homeownersii – even harder for new buyers.
The typical entry-level home is worth $130,200, up 9.2 percent from a year ago. This is
the slowest pace of annual appreciation on record since
June 2016. Last February, entry-level
homes were gaining value at a 12.5 percent annual pace. Forty-two
of the 50 largest U.S. metros saw slower entry-level home value
appreciation compared with a year ago. Jacksonville and Tampa, Florida saw the biggest declines in
appreciation, with each slowing by more than 16 percentage
points from breakneck paces of more than 25 percent a year earlier,
but both markets are still appreciating faster than the national
average.
The number of entry-level homes on the market is also on the
rise, which may be contributing to the slowing pace of
appreciation. Entry-level inventory rose 4.1 percent over the past
year, marking the seventh straight month of growing inventory – a
sign that this is a real shift in the market, rather than a
temporary change. Prior to this growth, the number of entry-level
homes for sale had fallen on a year-over-year basis for nearly four
years.
Salt Lake City and San Jose saw
the biggest increases in entry-level inventory, up 67.2 percent and
60.1 percent, respectively.
"Buying a home for the first time is an incredibly exciting yet
extremely stressful time," said RealEstate.com General Manager
Justin LaJoie. "Potential buyers who
tested the waters in recent years should have an easier time now,
which should be especially good news for anyone who made an offer
but lost their bid for a home. First-time buyers can give
themselves an extra boost by being well-informed, prepared buyers.
And the work they do – contacting more agents, doing more research
and visiting open houses – should pay off this year."
For first-time buyers trying to understand what they can afford,
RealEstate.com's All-In Monthly Price allows them to search based
on their monthly housing budget and down payment savings. Zillow
Group designed the RealEstate.com search experience to give
first-time buyers more transparency and a better understanding
throughout the home search process.
Zillow Group
Zillow Group, Inc. (NASDAQ: Z) (NASDAQ:
ZG) houses a portfolio of the largest real estate and home-related
brands on mobile and the web, which focus on all stages of the home
lifecycle: renting, buying, selling and financing. Zillow Group is
committed to empowering consumers with unparalleled data,
inspiration and knowledge around homes, and connecting them with
great real estate professionals. The Zillow Group portfolio of
consumer brands includes Zillow®, Trulia®, Mortgage Lenders of
America, L.L.C. (MLOA), StreetEasy®, HotPads®, Naked Apartments®,
RealEstate.com and Out East®. In addition, Zillow Group provides a
comprehensive suite of marketing software and technology solutions
to help real estate professionals maximize business opportunities
and connect with millions of consumers. Zillow Offers™ provides
homeowners in some metropolitan areas with the opportunity to
receive offers to purchase their home from Zillow. When Zillow buys
a home, it will make necessary updates and list the home for resale
on the open market. Zillow Group operates a number of business
brands for real estate, rental and mortgage professionals,
including Mortech®, dotloop®, Bridge Interactive® and New Home
Feed®. The company is headquartered in Seattle, Washington.
Zillow, Mortech, Bridge Interactive, StreetEasy, HotPads, Out
East and New Home Feed are registered trademarks of Zillow, Inc.
Zillow Offers is a trademark of Zillow, Inc. Trulia is a registered
trademark of Trulia, LLC. dotloop is a registered trademark of
DotLoop, LLC. Naked Apartments is a registered trademark of Naked
Apartments, LLC. Mortgage Lenders of America, LLC is an Equal
Housing Lender; NMLS 10287.
i Homes valued in the bottom-third of the overall
housing stock
ii
https://www.zillow.com/research/down-payment-hurdle-zhar-14790/
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SOURCE Zillow Group