Business
First-Time Buyers Face Hurdles to Homeownership This Spring
ALEX VEIGA, AP Business Writers
JOSH BOAK, AP Business Writers
Young people aspiring to buy their first home are already facing disappointment this year.
Rising prices are putting more homes out of reach, and pickings are slim because few properties have come onto the market this spring, when sales are supposed to take off.
Millennials are also burdened by heavy school debt and depleted savings that hurt their ability to qualify for a mortgage. Until their incomes start to rise meaningfully, many will be forced to keep hunting for a home while delaying the dream of ownership. This has weighed on overall home sales and economic growth throughout the rebound in housing the past three years.
“People need to see more money in their paychecks before they’ll take the plunge into homeownership,” said Greg McBride, chief financial analyst at Bankrate.
If early signs are any indication, there won’t a noticeable jump in new homeowners during the spring.
Amy Arnold and her husband began looking at listings in Denver late last year. The 28-year-old apparel buyer quickly found that the few homes in the couple’s price range got snapped up for more than asking price, leaving her exasperated at how “crazy” the market seemed.
For now, the couple has decided to keep renting a two-bedroom, one-bath house for $1,300 a month, hoping to have more money and find a better selection of homes once they jump back into the market.
“It’s very discouraging,” said Arnold. “Hopefully next year we will be able to buy, but there’s a chance we may have to rent again.”
Home prices nationwide have risen at more than double the pace of average hourly wages, making it harder for buyers to find the extra funds to save for a down payment.
In Denver, a limited roster of homes has fueled the rising prices and given sellers the upper hand. Forty percent of homes that sold in February went for more than the asking price, according to online real estate broker Redfin. That’s up from 21 percent a year earlier. In addition, half of the homes on the market went under contract in eight days or fewer.
“Typically, January, February even March are not quite as highly competitive as when you go into the spring months,” said Ilona Botton, a Redfin agent in Denver. “That’s not how it was this year. It has been multiple offer situations every single month.”
The limited supply of homes is widespread. In March, one measure showed it would take fewer than five months to sell all the previously occupied homes in the U.S. In a market more balanced between buyers and sellers, it would take about six, according to the National Association of Realtors.
What’s more, heavy demand for low-priced homes means their prices are rising faster. Homes priced at $135,000 or less jumped 9 percent for the year ending in February, according to data from CoreLogic. Homes that priced at $226,800 or more climbed 5 percent over the same period.
Beyond offering more money, some buyers are willing to waive home inspection or give sellers several weeks to move out following a sale, said Redfin’s Botton.
In general, areas with fewer homes for sale have stronger job growth that eclipses the pace of construction. Areas with larger inventories tend to keep the availability of housing in line with job growth.
In Columbus, Ohio, aviation company executive Ryan Holtmann had plenty of options. He and his wife started shopping for their first home at the end of last year. The couple visited about 15 to 20 houses before buying a three-bedroom home for $154,900 at the end of February.
“I was really surprised at how much was out there for the time of year,” said Holtmann, 33. “There were three or four we liked and would have been more than happy to go with.”
One factor preventing more houses from hitting the market is that many homeowners still owe more on their mortgage than their home is worth. That’s known as an underwater mortgage, or being in negative equity.
While millions of homes have returned to positive equity as values come back, some 5.4 million, or 10.8 percent of all homes with a mortgage, remained underwater as of the October-December quarter, according to CoreLogic. Nevada topped the list. Nearly a quarter of its homes with a mortgage were underwater.
More construction would help buyers, but activity has recovered slowly since 2010. That’s one reason a recent report by mortgage buyer Freddie Mac forecast that the U.S. housing market will continue to see low levels of homes for sale for the next several years.
As a result, even successful buyers are settling for less.
Brett Singley, a first-time buyer in Los Angeles and a father of four, knew the kind of house he wanted and how much he could afford. But after six months of searching, the civil engineer shifted his sights to smaller and less expensive townhomes. In March, he bought one in Santa Clarita, a northern suburb. He got a three-bedroom for just under $300,000 — $100,000 less than what he was prepared to pay for a house.
“We were originally looking for a four-bedroom house,” said Singley. “But we didn’t have a lot of options.”
___
Veiga reported from Los Angeles. Boak reported from Washington.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Business
Maximizing Your Bank Branch Experience
In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary. However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.
Sponsored by JPMorgan Chase & Co.
In a world of online tools that let you make banking transactions with the touch of a button, the idea of visiting a branch might seem unnecessary.
However, if you haven’t visited your local branch recently, you might be surprised by what it has to offer. Your branch is much more than a place to deposit and withdraw money – it can offer the opportunity to build valuable relationships with people who can help you achieve financial independence.
Diedra Porché, Head of Community and Business Development at Chase, talks about how the bank model has evolved to maximize the branch experience for customers; how connecting with your local branch team can help you think differently about money and investing for your future.
How can a customer feel connected to a bank branch?
I love that question because we ask ourselves the same thing every day. Being part of the community means meeting with local leaders to find out what they need from us and then designing our branches around that. For example, at some of our community branches we have what we call a living room where we can host financial workshops, small business pop-up shops or nonprofit organization meetings. We also hire locally. You feel much more connected talking about financial aspirations with people from your community who went to the same high school, place of worship or maybe frequented the same recreation center down the street when they grew up.
How can I build a relationship with my bank?
Customers should feel comfortable sharing their goals, needs and wants with their banker. Also, it helps to remember the Community Manager is there to help solve your finance challenges and build a roadmap for success. You might have a short-term or long-term goal to open a business, build your credit, become debt-free, buy a home, or save for retirement, and our community team can help. At Chase, we strive to make dreams possible for everyone, everywhere, every day. Your financial future starts with building those relationships.
How can customers change negative perceptions they have about managing their money?
Far too often, customers are intimidated when they visit a bank. Our goal is to demystify banking and money myths empowering people to make the right decisions. For example, a big myth is assuming you need a lot of money to have a bank account. You don’t! Another myth is you need to carry a balance on your credit card to build credit — actively using your credit card can demonstrate that you can use credit responsibly but carrying a balance won’t necessarily improve your credit score. Finally, understanding mobile and online banking safety is key. There are so many safeguards and protections in place to guard your personal information and funds.
What’s an easy step one can take to shift their financial behavior right now?
Cultivating self-awareness is a good first step. Start by taking inventory of your spending. Be honest with yourself about what you need and what you want. Too often, people confuse the two, which leads to bad decisions. Rent is something you need to pay. An extra pair of shoes is something you may want but before you buy them ask yourself if that’s the best use of your hard-earned money. Too often, our beliefs and our fears shape our financial realities. If any of those beliefs are limiting your financial behavior, it’s important to question and examine them, and then decide you’re open to learning something different.
What’s one perception about banking that you’d like to change?
I think folks are surprised there are so many resources available and accessible both at our branches and online, it’s always a good idea to visit a nearby branch and speak to a Community Manager or banker. Outside of what we offer in-branch, our teams also work with local neighborhood partners who provide a variety of services to support the community, businesses and residents. I received a unique piece of feedback from an employee who started with the bank and had lived in the same community his whole life. When he visited his local community branch, he said, “Diedra, when I walked in, I felt dignified.” Every time I recount that story, it warms my heart because that’s what we want — we want our centers to belong to the community.
Activism
Oakland Post: Week of May 1 – 7, 2024
The printed Weekly Edition of the Oakland Post: Week of May 1 – 7, 2024
To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.
Activism
Oakland Post: Week of April 24 – 30, 2024
The printed Weekly Edition of the Oakland Post: Week of April 24 – 30, 2024
To enlarge your view of this issue, use the slider, magnifying glass icon or full page icon in the lower right corner of the browser window.
-
Community2 weeks ago
Financial Assistance Bill for Descendants of Enslaved Persons to Help Them Purchase, Own, or Maintain a Home
-
Activism4 weeks ago
Oakland Post: Week of April 3 – 6, 2024
-
Business2 weeks ago
V.P. Kamala Harris: Americans With Criminal Records Will Soon Be Eligible for SBA Loans
-
Community2 weeks ago
AG Bonta Says Oakland School Leaders Should Comply with State Laws to Avoid ‘Disparate Harm’ When Closing or Merging Schools
-
Activism3 weeks ago
Oakland Post: Week of April 10 – 16, 2024
-
Community2 weeks ago
Oakland WNBA Player to be Inducted Into Hall of Fame
-
Community2 weeks ago
Richmond Nonprofit Helps Ex-Felons Get Back on Their Feet
-
Community2 weeks ago
RPAL to Rename Technology Center for Retired Police Captain Arthur Lee Johnson