The rate at which people are becoming first-time homebuyers is actually going up.
A report from real estate agency Redfin found that pending starter home sales were up 10.2% in July of this year compared to July of 2023. A starter home is defined as a residential property with a sale price that fell into the 5th-35th percentile.
Kenya Burrell-VanWormer, Co-Founder and Managing Partner of Equity Angels, laid out a few of the contributing factors to a better summer this year for first-time homebuyers.
"Falling mortgage rates are bringing back first-time homebuyers, more inventory is becoming available and we're looking at younger buyers who are looking at low-maintenance properties," she said.
The median price for a U.S. starter home was just over $250,000 this summer. In Texas, according to Redfin, the median price on a home in October 2023 was $342,400, about $50,000 less than the national median home price of $391,800 during the same month. Burrell-VanWormer, A Houston-based Real Estate Broker, said the Texas market continues to do well.
"We have a very strong position in new home construction right now," said Burrell-VanWormer. "Affordability still remains top of mind."
The Community Builders Advisory Service Group said in a recent report that Houston ranks #1 in single-family building permits across the nation. Dallas comes in just behind Houston at #2. Austin ranks 6th and San Antonio is 17th.
Burrell-VanWormer said new homes are available for first-timers in the Houston MSA (metropolitan statistical area) starting around $160,000-$199,000.
"We still have the climate and opportunity for homebuyers," Burrell-VanWormer added.