First-time homebuyers had a great year in 2017, with the new year already shaping up to be a further improvement. According to the National Association of Realtors, first-time homebuyers made up around 35 percent of the homebuying market last year, no doubt supported by a strong economy and continued mortgage affordability. If you’re looking to get off the sidelines and join Americans buying their first home in 2018, here are a few key tips and trends to know:
Prices cooling off
The last few years have seen housing prices that continue to accelerate. Most economists predict that in 2018, this trend will back off slightly. Lawrence Yun, chief economist for NAR, was among those who wrote in an annual review that the national average yearly rate of home price growth will finish 2018 at around 5.5 percent. With a yearly rate of around 6.5 percent nationally as of January 2018, this would be a noticeable shift that should benefit homebuyers.
Mortgages continue to innovate
Often first-timers lack the credit or assets that older borrowers might take for granted. This has been aided by new programs like one from Fannie Mae, a government-sponsored financial institution, that work to consider other forms of debt in the mortgage application process. By changing its credit standards, particularly relating to student debt held by would-be borrowers, Fannie Mae is making it easier for some to gain approval for a mortgage or a refinanced loan.
Tax reform creates new opportunities
Changes to the federal tax code signed into law in the final days of 2017 could make it easier for some Americans to save up for a home. According to estimates from The Washington Post, taxpayers with incomes between the 40th and 60th percentiles – more or less the national average – could save hundreds of dollars on their federal income tax returns next year. For those who own a business, the new tax rules could result in even bigger savings.
Of course, these estimates don’t account for every possibility, and only a licensed tax professional can properly advise you on what your return will look like in 2019. But for most Americans, in conjunction with rising wages, this could make it that much easier to continue saving up for a down payment on their first home.
Almost any way you look at it, 2018 should be a great time to buy your first home – it might even be a better time than last year depending on your situation. If you’re ready to make a move this year, take the time to contact a Mortgage Professional at First Centennial Mortgage, someone you can depend on every step of the way.