First Time Columbia SC Home Buyers Being Squeezed

Raising the necessary cash for a down payment is the toughest hurdle first time Columbia SC home buyers face on the road to home ownership. For many, government programs like FHA, USDA Rural Development guaranteed loans, VA loans and down payment assistance programs sponsored by state and local housing authorities have made a big difference.

Yet requirements by lenders in the wake of the QM Rule and overall tighter loan-to-value ratio standards are taking their toll. Average down payments are rising again, making it tougher for millennials who may face student loans and other financial hurdles.

First Time Columbia SC Home Buyers Have Less Down Payment

First time Columbia SC home buyers are stuggling to find enough down payment to buy a homeFewer first time Columbia SC home buyers are putting up larger down payments, according to the latest Realtor Confidence survey. About 60 percent of first time Columbia SC home buyers put down 6 percent or less compared to about 74 percent in 2009. It's a known fact that buyers who pay cash or put down large down payments generally win against those offering lower down payments. For buyers with sufficient financial resources, a higher down payment also means saving on mortgage insurance premium payments.

Down payments have already increased from last year when the average for first time Columbia SC home buyers was 5 percent versus 14 percent for repeat buyers, according to NAR's Profile of Home Buyers and Sellers.

Last year first time Columbia SC home buyers used a variety of resources for the loan down payment: 78 percent tapped into savings; 27 percent received a gift from a friend or relative, usually from their parents; and 7 percent received a loan from a relative or friend. Nine percent sold stocks or bonds and 8 percent tapped into a 401(k) fund. Among entry-level buyers who said that saving for a down payment was difficult, 54 percent said student loan expenses delayed savings.

As down payment requirements rise, the first-timer market share shrinks. In March, approximately 30 percent of Realtors reported a sale to a first time home buyer. Typically, first time buyers account for about 40 percent of all homebuyers based on data from NAR's Profile of Home Buyers and Sellers.

First time Columbia SC home buyers are ahead of the game by calling us or filling out our contact form to help them find their first home.

Find more tips for Columbia SC home buyers by clicking on our Columbia SC Home Buying Tips link to the right under Columbia SC Real Estate Categories.

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