Have First-Time Buyers Missed the Boat?

I'm hearing more and more reports about first-time buyer deals falling apart due to the tighter restrictions on loan qualifications. Buyers that could have qualified and purchased a home 2 months or even one month ago are now learning that they have a long way to go before being able to qualfy for a loan.

One recent example involved two mortgage brokers reaching out to about half  a dozen insitutions each. NO DEAL! A mortgage broker friend of mine reported that for the second time in her career, she was unable to fund a loan for a client.

Back in January and February before the supprime meltdown began, we were encouraging buyers to make their move. Prices had fallen, interest rates were good and there was a lot of inventory that had been sitting on the market. All of this had buyers sitting in a pretty good position and the more lenient lending guidelines of the salad-days were still in effect.

In addition to the tighter loan qualifications, first-time buyers face the mounting obstacle, in California, of affordable housing as we noted a few days ago in our Real Estate Industry News section with this item:

Bad News for First-Time Buyers - From the California Building Industry Association:

“California needs new homes in all price ranges, and given the ever-rising fees and constraints on housing, it’s all but impossible to meet the need in the entry-level market, where the need’s the greatest,” Rivinius warned. “Given California’s constant population growth of some 500,000 people a year, the state needs between 220,000 and 240,000 new homes and apartments every year just to keep pace. Unfortunately, we haven’t hit that level since the late 1980s, and unless major reforms are enacted at the state level to allow increased production, it does not appear that we will reach it anytime soon.”

More and more first-time buyers are going to be hearing the phrase No Deal. Real estate agents and mortgage brokers are going to be putting in more time and effort to wind up with No Deal. 

The old addage - You snooze, you lose - could apply here for some, but for most first-time buyers, it's a case of having had to wait for all the pieces of the puzzle to come together. Unfortunately, during the wait a very important piece of the puzzle changed dramatically.

The Harper Team works with many first-time buyers and we remain committed to do so. If you are thinking of buying your first home, don't wait until you think the time is right - start the process much, much earlier with education and information. Talk to an agent and a mortgage broker to find out where you are, where the market is, and where the industry is.