Where Have First Time Long Island NY Homebuyers Gone?

First time Long Island NY homebuyers seem to be disappearing right before our eyes. The same is true nationwide, as the percentage of homes that were sold to first-time homebuyers dropped to 33% this year, the lowest percentage in almost three decades.

First time Long Island NY homebuyers seem to have disappeared despite near record low mortgage rates

This drop in first time Long Island NY homebuyers is despite the fact that mortgage rates are hovering near record lows and home prices are still off about 15% compared to the housing boom peak, according to the S&P/Case-Shiller 20-city home price index.

Young adults, who make up the lion's share of first time Long Island NY homebuyers, want to own. According to a Zillow survey released in October, respondents ages 23 to 34 were, in fact, very bullish on home buying, with 83% of young renters expecting to buy a home someday.

First Time Long Island NY Homebuyers Want to Purchase a Home

The problem is not desire. Blame it on heavy student debt loads and incomes that aren't keeping up with rising home prices. Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the workforce.

Strict lending standards have also made it more challenging for Millennials to qualify for mortgages, especially since many are carrying thousands of dollars in student loan debt. This has also added costs to mortgage borrowing for many young buyers. With limited credit histories, they usually have lower credit scores and lack the funds to make large down payments.

Long Island NY homebuyers using low down payment FHA loans, for example, pay about $50 more a month for mortgage insurance on loans of $100,000. And borrowers with 640 credit scores getting Fannie Mae- or Freddie Mac-backed loans pay fees that are three percentage points higher than borrowers with 740 credit scores.

Get more timely information for Long Island NY homebuyers in our section on Long Island NY Homebuyer Tips to the right under Long Island NY Real Estate Categories.

We post daily on Twitter, and find us on Facebook as well.

Why There Aren’t More Long Island NY Home Buyers

The share of would-be Long Island NY home buyers who think now is a good time to buy a Long Island NY home officially plummeted to an all-time low in August, according to a new housing industry report.

Fannie Mae's August National Housing Survey results found this to be the second consecutive month it has fallen, dropping six percentage points since June to 64% and tying the all-time survey low.

More potential Long Island NY home buyers are losing interest in buying in the current economic conditions.

Fannie Mae's recent numbers lend support to a forecast that 2015 won't be all that hot either, as more and more potential Long Island NY home buyers are losing interest in buying in the current economic conditions.

The current attitudes about the home buying environment reflects a shift away from record home buying affordability without enough consumer personal financial sentiment to compensate for it.

Not All Bad News for Long Island NY Home Buyers

The Fannie Mae survey found some sectors of the mortgage production universe are seeing significant growth. And Americans' attitude toward the future of the Long Island NY housing market is getting more positive, suggesting that housing activity could resume its modest recovery in 2015 after some pullback in 2014.

While prospective Long Island NY home buyers certainly wouldn't mind if home prices came back down, it could be rough for the Long Island NY economic recovery. Because homes have regained so much of their lost value, many Long Island NY home buyers once again have positive equity in their homes. And if prices were to decline, many homeowners could once again find themselves underwater, which would be a very bad thing.

The share of people who said they would buy if they were going to move fell to 64%, while the share of people who would rent increased to 32% — the narrowest gap in more than a year.

We'll continue to keep a sharp eye on trends that may affect Long Island NY home buyers, and report any and all trends in future updates here on our website. In the meantime, find more current real estate news articles under our Long Island NY Real Estate News section under Long Island NY Real Estate Categories to your right.

Why Young Long Island NY Homebuyers Are Holding Back

The younger generation of potential Long Island NY homebuyers are finding barriers to homeownership almost overwhelming. The lack of affordable homes, student debt, and unemployment, are keeping many of these young would-be-buyers either renting, or living with parents.

This inability for young Long Island NY homebuyers to get started as homeowners is taking some of the punch out of the housing recovery. Although "millennials," or 20- to 34-year-olds, are starting to find jobs and move out on their own, most are becoming renters, not buyers. Many are starting families, which adds expenses to the monthly budget that can't be allotted to a mortgage payment.

Many potential Long Island NY homebuyers are faced with student debt and starting families that hold them back from homebuying
We're at a point now where young people are starting to move out of their parents' homes. But that's only just begun over the past year or so. When young people start moving out of their parents' homes, most will opt to rent first before they buy. The key thing about young adults is there still are a lot of barriers to homeownership.

It's not just the limited inventory on the lower end, it's saving for the down payment to qualify for the mortgage in the first place. It takes years of work to save enough for a down payment and qualify for a mortgage. And for young people who are just getting jobs now, they'll be renting for awhile before they will even qualify to buy.

Student Debt Preventing Most Young Adults From Becoming Long Island NY Homebuyers

Student loan debt makes it harder to save for a down payment. What you might have been saving is instead going to pay back those student loans.

The new Qualified Mortgage rules take into account all of your debt (affecting) your ability to repay a loan. Student loan debt is yet another barrier to home ownership for young adults wanting to become Long Island NY homebuyers.

The good news for the Long Island NY housing market is that price gains are slowing down somewhat. In addition, the share of home foreclosures has gone way down as foreclosed homes have gone through the entire process and been sold off.

Potential Long Island NY homebuyers still trying to decide if it's cheaper to buy than rent need to analyze their future situation carefully.

If you plan to stay put for seven years, itemize (your deductions) in the 25 percent (tax) bracket and get a mortgage of 4.5 percent, it's about 15 to 25 percent cheaper to buy than to rent in Long Island NY . If you're not itemizing and you only stay put for five years, buying is more expensive than renting in most cases.

So your personal circumstances matter. How long you stay put. Whether you're itemizing. And also what mortgage you can get.

Check out some of our other articles and tips for Long Island NY homebuyers by clicking the Long Island NY Home Buying Tips link to your right under our Long Island NY Real Estate Categories.

Architectural Designs – What Long Island NY Homebuyers Want

When it comes to Long Island NY homebuyers, it seems more and more people want open and more accessible homes, with outdoor living space, according to a recent housing trend report.

The American Institute of Architects recently released a quarterly survey on home-design trends that gathered input from architecture principals, partners and firm leaders from more than 500 AIA member–owned residential architecture firms.

According to the AIA's first-quarter 2014 report, some architects are designing slightly larger homes with more open spaces. About 15 percent of residential architects reported increases in home sizes, according to the report.

And 20 percent of architects reported home sizes were decreasing, down from 34 percent in the same period a year earlier.

Long Island NY homebuyers want more space and combined living areas in new homes today.

More Long Island NY Homebuyers Want Combined Space

Some builders are creating homes for Long Island NY homebuyers with a more efficient use of space. Architects also are adding more features that make Long Island NY homes appear larger. According to the survey, more homes are being designed with higher ceilings and two-story entryways. An increase in open-layout concepts for homes was also reported, according to the survey.

More Long Island NY homebuyers are asking for new homes with kitchens and living rooms combined in one large room.

Residential architects also reported a significant increase in home layouts that implement improved accessibility. In-home accessibility, which includes wider hallways and fewer steps, was reported by almost two-thirds of the survey respondents. More than half, 55 percent, have reported that accessibility into and out of the home with on-grade entrances and ramps are becoming more popular features for Long Island NY homebuyers building new homes.

There is one other space that an increasing number of homes are adding, but it's not indoors. No matter the climate, people want a living space outdoors. This could be a patio, a deck that is connected to multiple living areas, or an outdoor fireplace or kitchen. Nearly 70 percent of residential architects report outdoor living to be increasing in popularity, according to the survey.

Many new Long Island NY homebuyers are looking to make green enhancements to their property. These include landscaping that requires little water and rainwater retention and reuse features for newer homes.

The desire to have green, energy-efficient products has moved inside, too. Consumers are very interested in investing in appliances and heating and cooling systems that are energy-efficient, and "they want the green (features) to impact the cost of operating the house." For more Long Island NY homebuyers tips, check out our Long Island NY Homebuyers Tips section of articles.

Why Long Island NY Home Buyers Won’t Take the Leap

Many Long Island NY home buyers are giving up trying to get a mortgageHere we are, half way through the year, and Long Island NY home buyers are just not jumping on the idea of buying a home. The spring buying season was down 1.2 percent in May, and declines in borrowing to buy a home in the month of May are virtually unprecedented.

Sales are down year over year. April sales are down 6.8 percent from a year ago. Cash sales continue to account for a large percentage of purchases and financed purchases have fallen far below normal even though it's easier to get a mortgage today than it was during the mini-boon of a year ago.

Median FICO scores for successful conventional purchase loans have fallen from 761 to 755 over the past 12 months. Nothing to write home about but incremental progress nonetheless.

Despite the gradual relaxation of lending standards, many Long Island NY home buyers are simply giving up trying to get a mortgage. Fear they will not qualify for a mortgage has stopped half (50.7%)  of today's potential Long Island NY home buyers from pursuing the financing they need to buy a home, according to loanDepot's survey released last month.

The survey found plenty of pent up demand. One in three Americans (29%) say they'd like to buy a home in the next two years and 71 percent of those who want to buy a home in the next two years will need financing.

Yet 74% of those who want to buy a home but fear they won't qualify for a mortgage admit they haven't taken any steps to qualify. Only 27 percent have actually taken steps to see if they can get a loan.

So Why Are Long Island NY Home Buyers Giving Up?

The survey found that:

  • Potential buyers fear they won't qualify.  Half (53%) erroneously think it's harder to get a loan today compared to a year ago.
  • Many potential Long Island NY home buyers think they need a higher FICO score to get a loan than they actually do today. Half of all Americans don't know what minimum FICO score is required to qualify for most loans, while 18 percent think they need a minimum FICO score of 680 to 770+ to qualify. In reality, 33 percent of all closed loans in Feb 2014 had an average FICO score of less than 700 compared to 24 percent one year ago.
  • Many potential Long Island NY home buyers overestimate the impact that their debt to income ratio (DTI) has on their credit worthiness. Of those who want to buy but have given up, almost a third (34%) say their DTI is too high while 24 percent say it's lower than what is needed. By comparison, 15 percent of those who want to buy a home but are not concerned about qualifying for a loan say their debt is too high. In fact, industry reports show many mortgage lenders have relaxed their debt to income requirements.

The survey confirms uncertainty and confusion about qualifying for a loan are driving more young potential Long Island NY home buyers away from homeownership than any other age group. However, their uncertainties and fears may be much worse than reality.

Get all the news that affects Long Island NY area home buyers by clicking the Long Island NY Real Estate News link to your right under Long Island NY Real Estate Categories.