Study: 11% of Americans plan to buy a home this year
Average buyer hopes to spend $269,200
InvestigateTV - According to a new NerdWallet study, 28 million Americans plan to buy a house this year. The study noted, however, that this is likely an unrealistic number, as on average there are only around 5 million homes purchased each year.
A key finding of the study was that prospective home buyers hope to spend $269,000, on average.
NerdWallet Data Analyst Elizabeth Renter said buyers should temper their expectations, however, as that figure is significantly lower than the typical home price of $379,100. She said to focus on setting a realistic budget based on your family’s income.
“I think one common mistake is people just look at the house price when they’re setting their homebuying budget,” Renter said. “What they should do instead is look at the monthly payment because that monthly payment is not going to only include the house price, but the mortgage rate, the down payment, the homeowner’s insurance and your monthly payment is what you really see and what you really need to work into your monthly household budget.”
Renter said you can go online and use free mortgage calculators to help you figure out what the mortgage would be on different homes.
She also recommended buyers research the housing market where they intend to live, instead of focusing on national averages of home prices.
“You need to look specifically at where you want to buy,” Renter advised. “Get in touch with a local agent and ask how long it’s taking for homes to sell there. How many homes are on the market within your budget there?”
Renter said there are some indications the power in the market is shifting away from sellers towards buyers, meaning there may be more wiggle room on getting inspections done, moving closings dates, or asking for repairs. However, she cautioned that does not mean buyers are completely in control.
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