Purchasing real estate for the first time is understandably a nerve-racking endeavor for many consumers. It’s neither a decision to take lightly nor a transaction to conduct without the assistance of a professional. To help ease the process, WalletHub spoke to Richard Martin, a professor in the Real Estate Program at Terry.
What should first-time home buyers consider when choosing a neighborhood?
Depends on how long the buyers are expecting to stay. If they view the home as a starter home with a goal of moving up relatively quickly then, obviously, they need to be looking for a neighborhood with a strong upward trajectory. In fact, they may want to consider a neighborhood that isn't currently so nice (in order to spend less) but they think will appreciate quickly. If they are going to stay for a while they need to be focused on neighborhood attributes that they are likely to value in the future. For example, they may be childless at the moment but will want to consider school quality because it could be a concern in a few years.
What do you recommend as the minimum down payment for a first-time home buyer?
Given the historically low levels of current interest rates I see no reason to put down any more than the lender is requiring of you.
Will the market for first time home-buyers make a comeback in 2015?
The most recent signs point to an increase in first time home buyers. However, the likelihood of interest rate increases (whenever they actually occur) makes this recovery fragile. If interest rates begin to increase soon and if the increases are substantial then the current increase may reverse itself.
How can federal, state and local policymakers responsibly and effectively increase home affordability, particularly for first time homebuyers?
Reduce barriers to new home construction. Nothing keeps home ownership affordable like allowing homebuilders to quickly respond to price increases by building new home when they are affordable.
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