- Posted July 6, 2022
A Financial Planner's Take On Why Young Home Buyers Are Having So Much Trouble
If you’re a young adult trying to purchase a home, there’s a good chance you’re not having an easy go of things. Purchasing a home has always been difficult for young people, but even more so today. These are a few of the common problems young home buyers are facing today according to our certified financial planner.
Buying a house is not what it used to be. When your parents were young, their first home cost them a hefty sum, but they could afford it based on the average salary of a young adult. However, real estate inflation has continued to rise without a comparable rise in pay for many of these positions. This means that young people are consistently having to fork over most of their paycheck to afford a home. The average home in the United States today costs around $440,000. In 1990, that number was around $80,000. The increase in prices makes it nearly impossible for young people to afford to buy homes. They end up needing to go into tremendous amounts of debt to afford a house, which can be a big struggle.
Even though the housing market has gotten more and more expensive, it seems as though there are fewer houses on the market than ever. In the most recent few years, it’s been harder than ever to find a home to purchase. People have had to make tremendous sacrifices and settle for a home that’s well below what they want because it’s all they can get. Our financial planner states that fewer homes on the market mean prices will be higher. This loop keeps repeating until almost no one can really afford to own a home. The lack of options available is another big issue young prospective buyers typically face.
Because there are fewer homes on the market, the competition is fierce. Houses are selling hours after being placed on the market, making it even more difficult for buyers. In order to successfully purchase a home, buyers often need to make a lot of compromises and take the first home they can make an offer on. Because these homes are also more expensive, they’re likely paying way over their budget for a home that isn’t perfect for them. The competition makes individuals often purchase homes blind, without even doing a showing. Prospective buyers need to constantly be on alert for homes going up for sale in their desired area, and jump on anyone that comes on the market.
Purchasing a home has always been a tricky ordeal, especially for young people with little experience. However, with the continual shifts in the real estate market, the process is more complicated than ever. These are just a few of the common problems young home buyers typically face. Learn more about our financial planning services for individuals here.
Check out this article on how to free yourself from the burden of debt!
Contact Tenpath Financial Group for certified financial planning services.