Only 34% of buyers in this year’s survey found the mortgage process somewhat or much more difficult than expected, a decrease from the 37% figure a year ago.
The NAR survey also found that 58% of homebuyers took out a conventional mortgage to finance their purchase. Meanwhile, 34% of first-time buyers financed their purchase with a low down payment mortgage backed by the Federal Housing Administration. This is an increase from the 33% share in 2016, but a decrease from the 46% five years ago.
NAR also found that the share of sales to first-time buyers fell to 34% in 2017 from 35% a year ago to its fourth lowest share since 1981. According to the NAR, many first-time buyers are priced out of the market given the severe inventory shortage in much of the US.
“The dreams of many aspiring first-time buyers were unfortunately dimmed over the past year by persistent inventory shortages, which undercut their ability to become homeowners,” NAR Chief Economist Lawrence Yun said. “With the lower end of the market seeing the worst of the supply crunch, house hunters faced mounting odds in finding their first home. Multiple offers were a common occurrence, investors paying in cash had the upper hand, and prices kept climbing, which yanked homeownership out of reach for countless would-be buyers.”
In addition to these findings, the NAR survey also revealed consumer and housing trends including increases in single female and trade-up buyers; the growing occurrence of buyers paying the list price or higher; and the fact that nearly all respondents use a real estate agent to buy or sell a home.
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Homebuyers are encountering a much smoother mortgage process than they did before as their financial health has improved along with a slight ease in credit standards, according to the 2017 Profile of Home Buyers and Sellers survey released by the National Association of Realtors (NAR).