How first-time homebuyers are managing in Massachusetts
Between high prices and limited options, it’s a wonder young people ever manage to buy a house here.
Against the odds, first-time home buyers are making a comeback in Massachusetts, even as they battle ever higher prices and a shrinking number of homes for sale.
A new report by the National Association of Realtors finds first-time home buyers are back in the hunt in the Bay State after watching their share of the market dwindle over the past few years.
Buyers snapping up their first homes accounted for 41 percent of all Bay State sales in 2015. That’s up from 39 percent in 2014, when it hit a 12 year low. That also bucks national trends, which saw first-time buyers’ share of the market fall to 30 percent, down from 32 percent in 2014, according to the NAR report.
The first-time buyer comeback happened despite home prices that reached new heights in 2015 and inventory levels of unsold homes that hit new lows.
Still, a booming local economy and thriving jobs market, driven by the biotech and high-tech sectors, may have given a boost to new home buyers, who tend to be younger and in the earlier stages of their careers.
“Despite the ongoing lack of inventory and increasing median prices, Massachusetts buyers came out in force to snap up what they could, and homes didn’t stay on the market for long,’’ said 2016 MAR President Annie Blatz, branch executive at Kinlin Grover Real Estate on Cape Cod, in a press statement.
Who are they?
The report also offers a broad look at the demographics of first-time buyers in Massachusetts and how they stack up to their counterparts in the rest of the country.
The age at which many buyers are purchasing their first homes in Massachusetts appears to be creeping upward, with buyers last year “skewing older’’ Blatz noted.
While the median age was 32, a majority of first-time buyers, or 64 percent, were between 25 and 34 years old. Another 17 percent were between 34 and 44 years old, while just three percent were between 18 and 24.
Nearly 60 percent were married couples, 17 percent were single women, and 16 percent were unmarried couples. Single men made up the smallest category, accounting for just 8 percent of first-time buyers.
Massachusetts first-time buyers were somewhat wealthier than their counterparts in other states, with a median household income of $77,400 compared to $69,400 among first-time homebuyers nationally.
“Many Realtors on the ground have reported to me an overwhelming interest lately in first-time home buyer seminars and workshops held across the state,’’ MAR’s Baltz stated. “Hopefully we’ll see the trend continue and spread across the country.’’
Who is selling to them?
By contrast, sellers in Massachusetts were considerably older, with an average age of 52, having owned their homes on average for 11 years.
Massachusetts sellers reported median income of $113,000, compared to $104,139 nationally, with 17 percent saying the reason they were putting their home on the market was because it was too small. Twelve percent said they were relocating due to a job, while 16 percent cited a change in their family situation, such as divorce, marriage, or birth of a child, according to the NAR report.
Another 13 percent wanted to move closer to family and friends.
Perks and complaints
Massachusetts sellers also tended to be stingier, a perk that comes with a tight housing market that naturally favors sellers over buyers.
Just a quarter of sellers offered up incentives to seal the deal, with home warrant policies, credit for remodeling and repair work, or offers to help pay closing costs the most common sweeteners. That’s compared to 37 percent of sellers nationally who had to throw in something extra to close a deal.
Just over half of Massachusetts sellers – 52 percent – said they did not have to lower their price, the report found.
There were also some significant complaints about the mortgage process.
Almost all first-time buyers and 93 percent of buyers as a whole in Massachusetts needed a mortgage to purchase a house. Most buyers in Massachusetts – 67 percent – used savings to pay for the down payment.
However, nearly half of buyers in Massachusetts – 47 percent – complained the mortgage process was either “much more difficult than expected’ or “somewhat more difficult.’’
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