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Improved opportunities for first-time homebuyers

On Behalf of | Nov 13, 2018 | Residential Real Estate |

People in California considering entering the residential real estate market may have better opportunities to pursue first-time homeownership. Real estate prices have been on the rise since the end of the recession sparked by the 2008 financial crisis. While many homes dropped in value during the recession itself, for many, it was a poor time to seek a mortgage and invest in a new home. However, as people saved for down payments and prepared to apply for mortgages, real estate prices have continued to climb, putting homeownership outside of the reach of many younger people.

Homes in areas with strong economies and healthy job markets have seen competition among buyers, driving residential real estate prices up. Home sales have continued to rise, but housing costs have been rising above incomes. This has been especially true in major urban centers. While many existing homeowners were able to move up in this market, it presented a stronger challenge for people seeking a first-time entry into homeownership.

However, experts say that trends have begun to change, even though home prices show no sign of decreasing. Sales, however, have been slowing down across the country for several months. While the housing market has not crashed, the slower growth or mild decline could present better opportunities for buyers by lessening competition and reducing massive price increases. There are a number of reasons for the changing trend, including the increase in mortgage rates. Average mortgage interest rates have gone up to nearly 5 percent, a full point ahead of the rates one year earlier.

While analysts note that affordability continues to be a challenge when buying a home, there could be opportunities for new homebuyers. People considering purchasing residential real estate may benefit from working with an attorney. A lawyer might be able to negotiate a fair contract and resolve emerging issues.