A recent survey conducted on behalf of the National Association of Realtors (NAR) concluded that the majority of Americans still consider buying a new home to be one of the soundest financial decisions they can ever make. While this is obviously good news, that same survey also revealed troubling concerns in the way the public perceives the nation’s banking industry.
In NAR’s National Housing Pulse survey, released earlier this year, more than 80 percent of potential homeowners considered down payments and closing costs to be the greatest challenges to home ownership. While this is not a new hurdle for many, these numbers are cause for concern.
“For decades, the biggest roadblock for young people looking to buy their first home is saving the money necessary for a down payment,” says Sandy Greene second vice president of the Sussex County Association of Realtors. “The federal tax credits have helped, but home values have increased so much over the last few years, especially here in southern Delaware, that young couples are finding it increasingly difficult to qualify for new home financing. That needs to change moving forward.”
In that same survey, which involved telephone interviews of more than 1,000 participants, 7 in 10 people reported a lack of confidence in their ability to be approved for a home loan. That is a big problem if we are to embark upon any type of sustained recovery, here in Sussex County and around the country.
As the United States continues to rebound from the worst economic downturn since the Great Depression, many have lost faith in our banking system. They see creditors tightening restrictions, hoarding money, asking for government bailouts and basically waiting until the economic climate turns around before making any real commitments.
Yes, the government extended the first time homebuyer credits and yes, numbers are up as homebuyers from coast to coast begin to jump back into the fold. But many of these buyers were potential buyers all along, just waiting on the sidelines for the right opportunity to get involved.
Americans have been helped by these credits and it has helped spur interest in the country’s real estate markets. But, we must restore the confidence in our banking system if we are to move forward and keep these recent numbers trending in the right direction.
A key number in the report centers around real estate markets in the third and fourth quarters of 2009. When conducted a few months ago, three-fourths of those surveyed believed it was a good time to buy a home, a number that has increased steadily the past two years. The problem is money, or more specifically, access to it.
The interest in the nation’s real estate markets is picking up, but the issue of cash flow is one we as real estate professionals need to address.
For a young married couple who has fed their piggy bank on a regular basis over the course of many years, there is no feeling like the one you get the first time you walk into a new home, a home that you now own, that you worked so hard for.
As a country and as an industry, we must remember that feeling and do everything in our collective power to provide it to more and more prospective homebuyers across Sussex County, across Delaware and across the United States of America.
The federal tax credits, the cheap interest rates and the burgeoning supply on the market all point to the perfect time to buy a new home. More people are starting to take that plunge, building momentum that we, as real estate professionals, need to work on maintaining.
If it’s access to affordable loans that is holding up that process, that’s fine. At least we know what the problem is; now we just need to work on finding a viable solution to fix that problem.
I have no doubt we can, if we all work together toward a common goal.
Here’s wishing everyone a Merry Christmas and a Happy New Year from all of us here at the Sussex County Association of Realtors. May 2010 be a wonderful and memorable year for all of us here in “God’s Country.”
