First-time home buyers can’t keep up with ‘exhausting’ price growth
Paul Centopani September 28, 2021, National Mortgage News
Notes about this article as it relates to our Notary/Signing Agent World:
Start paying attention to signing appointments that may have a second mortgage in the form of down payment assistance. There are various types of down payment assistance programs. Some may have just a couple of pages while others may have as many as 50 additional pages. In my opinion, this equates to an increase in the fees offered for the signing appointment.
‘With skyrocketing home prices — especially for starter homes — and a Biden administration mandate to raise the rate of homeownership, down payment assistance programs are getting increased attention. The latest infrastructure bill, for example, includes a provision for up to $25,000 in down payment assistance for first-time home buyers.’
‘While record-setting price growth has boosted homeowner equity to historic levels, they’ve also made it nearly impossible for first-time buyers to save for a down payment.
As of June, the typical borrower needed 7.9 years to accumulate 20% down, compared to 7.1 years in January 2020, according to Tomo. This assumes a savings rate of 10% of income per month, which is high for most consumers.
The down payment is getting harder and harder to build up over time. That means plenty of first-time buyers need low down payment options like never before to pull off their purchase,” Skylar Olsen, Tomo principal economist, said in a statement to NMN. “First-time buyers increasingly turn to their mortgage lenders to understand all their options, and that might mean exploring different products like FHA loans, because to keep up with the down payment under this kind of appreciation is exhausting.’