First-Time Homeowners Squeeze
Higher prices and higher rates are putting the squeeze on first time homebuyers and Seattle’s housing market is no exception. CNNMoney.com recently profiled this issue and provided some advice as well.
What a difference a year makes when you’re in the market for a new home, especially if you’re a first-time buyer.
Thanks to a combined jump in mortgage interest rates and home prices, a starter home in many areas of the country could cost you several hundred dollars more per month today than if you bought it last year.
Nationwide, median home prices rose at annual rate of more than 10 percent in the first quarter of 2006, according to the National Association of Realtors.
Meanwhile, rates on adjustable rate mortgages, the most common for first-time buyers, are up more than a percentage point.
According the WSU’s Center for Real Estate Research the Housing Affordability Index for King County is 80%. That means the typical family only has 80% of the income to purchase a median-priced home. For 1st time buyers in King County, it’s even lower at 44.7%. Less than 1/2 of 1st time buyers can afford a home in King County. 1
1 Washington State University - “Washington Home Sales Stabilize While Affordability Sags”.