First-time home buyers finding it more difficult to buy
Minneapolis, MN: It's going to be a tough home-buying market this spring, especially for first-time buyers or even people looking to move up into a just slightly more expensive home. As the housing market continues to improve, we again are starting to see it become harder for first-time buyers to enter the housing market due to low inventory, and home prices starting to climb.
Starter homes are increasing in value faster than move up homes. The availablility of what most markets would consider starter homes is down 10 per cent so far this year compared with 2015 on a nationwide average. Here in the Twin Cities market of Minneapolis and St Paul, it would appear to be getting even worse. The sub $250,000 range has exploded, with anything nice scooped up in just days, and typically with multiple offers.
To counter this, we suggest that if you are thinking of buying a house anytime soon, that you make the move now before home prices go up higher. Also consider that the Federal Reserve is likely soon to increase the overnight lending rate, making mortgage rates most likely a bit higher later this summer.
Of course you should become fully mortgage lender pre-approved before looking at homes so you know what loan options are available to you, and your maximum mortgage loan amount so not only can you immediately make an offer on that perfect house, but you know your limits if you get into a bidding war on that dream house.
Finally, consider making your first offer at full asking price, and be sure to work with an experienced Real Estate Agent in your area.