Favorable interest rates in some states, a better economy, and an improved consumer confidence helped with increasing home ownership rates in the United States, according to new Census data.
More than 1 million people became new homeowners in the last three months, primarily because of more millennials willing to acquire their first houses. In some cities like Provo, Utah, buyers who are below 35 years old were responsible for 56% of all housing transactions in the same period. The same applies to the market in Pittsburgh, where 57% of home purchases originated from younger Americans.
The Cost of Buying a House
Utah’s hot housing market reflects the shifting preference of people from renting to owning properties. Despite the high average prices of homes in cities such as Salt Lake City, buyers remain undeterred since the state has one of the lowest mortgage rates in the country.
If you are searching for a good housing development in the city, some of your options include new townhomes in Riverton, Utah.
But you need to make a decision quite soon after seeing one, as listings go off the market within 37 days. You could also check out other housing communities in Herriman, Draper, and St. George, where new homes might be cheaper than existing properties.
Confidence in Money & Family Matters
CoreLogic attributed the rising number of home buyers to higher spending power among Americans. The Census data showed that tenants in the last three months fell by 167,000 households, possibly including those in Rochester and Buffalo, New York, and Des Moines, Iowa. Homeownership rates in these cities have increased because of younger first-time buyers.
More people became stable financially, and many are ready to start a family that eventually led them to consider acquiring a house. As a result, there were fewer people who decided to stop renting and move into their own homes even if it means applying for a mortgage.
Current Mortgage Interest Rates
The national average interest for a 30-year, fixed-rate mortgage is 4.84%. Home buyers in New York pay nearly 5% on average in interest, but that has not stopped them especially for those with a high credit score. It is possible to pay a mortgage with an APR of 4.79% if you have a score above 760. Borrowers who have scores between 680 and 719 could be eligible for a 5.16% APR.
The actual rate, however, does not only depend on your credit score. The housing market in your area and competition among lenders serve as other factors. As an example, the average mortgage interest of 4.77% in Utah is lower than the U.S. average. Lenders may have lowered their rates for qualified borrowers to lure more people, given the competition in the state.
Renters may spend less on household expenses compared to homeowners, but the latter has the advantage in terms of net worth. Even if owner-occupiers pay for taxes, maintenance and other expenses, the increasing value of real estate is just one benefit of being a homeowner.