The American dream of homeownership is getting more elusive for many these days, as high prices, low supply and rising interest rates are keeping first-time homebuyers on the sidelines. Some analysts are even lamenting what they call the Death of the First-Time Homebuyer. The numbers for those looking to enter the market are not pretty. The median monthly mortgage payment is up 56 percent from a year ago, supply of homes is nearly one million short of demand, and mortgage interest rates recently rose to their highest level in a decade.
Mark Johnson, president of JPAR Real Estate, says the Houston market is seeing a similar crunch for first-time buyers. "Right now the entry-level price for Houston proper is about $240,000, and there's about 28 days of inventory on the market," he tells KTRH. "So those first-time homebuyers have limited inventory."
While there are red flags all over the national housing market, there are signs of improvement in the local market. "In Houston, as recently as April we had only 2,500 homes for sale---traditionally we have about 8,000," says Johnson. "But right now we have about 4,500...so the inventory has increased quite a bit, but still not as much as we need it to."
As for interest rates, Johnson warns to expect continued volatility...but that's not necessarily a bad thing. "We've seen a pretty big opportunity for first-time buyers in recent weeks," he says. "Rates went as high as seven percent recently, and now they've dropped."
The average 30-year fixed rate mortgage is about 5.2% this week, after briefly dropping below the five-percent mark. "They're going to go up and down a bit, there's just some volatility," says Johnson. "But for first-time buyers, I'd take advantage anytime rates drop, and I would be in the game for the long term."
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