Prospects appear to be improving for new market entrants
First-time homebuyers have seen some challenging times across the US mortgage market in recent years amid intense bidding wars, climbing interest rates and steep home prices – but 2024 is shaping up to be a positive year for that buyer cohort, according to a leading mortgage professional.
Kristin O’Neil (pictured top), senior loan officer at Open Door Lending in Virginia, told Mortgage Professional America that new entrants to the market were primed for better buying conditions in the months ahead with their awareness of suitable products growing and a more amenable market set to emerge.
“I feel like 2024 is the year for first-time homebuyers – especially coming off the last two years,” she said. “I think the industry as a whole has done a really great job on educating buyers that there’s a lot of opportunity right now in the current higher-interest-rate market.
“While affordability is still a problem at large, I think there’s a lot of opportunity for buyers right now. We’re just not seeing quite as much competition as I think we will see once we do see a decline in rates.”
Recent months have seen a growing trend of first-time homebuyers having offers accepted with low to no down payments, according to O’Neil, with FHA, VA, and USDA financing all becoming increasingly prominent.
That buyer type is also increasingly well educated about the market and the different ways they can qualify for a home, she said, even in the turbulent current environment.
“I think for the most part, the first-time homebuyers that I speak with are using their resources, they’re doing research, and they’re coming with really thoughtful questions that I think are ultimately helping them succeed,” O’Neil said.
Samantha Shelton of Align Lending notes a more balanced market compared to the extremes of the pandemic era, with manageable work-life balance for originators. https://t.co/yYTo3s8P91#mortgageindustry #industrytrends #mortgageoriginator
— Mortgage Professional America Magazine (@MPAMagazineUS) March 4, 2024
First-time buyers turning to mortgage pros in growing numbers
While it might be assumed that tech-savvy younger mortgage shoppers would prefer to conduct all their business online and deal with a mortgage professional as little as possible, that hasn’t necessarily proven to be the case, she added.
A growing number are turning to experienced and authoritative loan officers and brokers to help guide them through the market and find as strong a mortgage solution as possible.
That’s an emerging trend amid an increasingly fraught and complex borrowing environment that shows little sign of easing despite the expectation of lower rates down the line this year.
“I’m seeing the younger generation of homebuyers really value the importance of who they’re working with,” she said. “I think they realize that partnering with a lender who’s local and is available nights and weekends to help them strategize while they’re making offers is really crucial.
“It’s interesting, because you would kind of think the opposite. I think many people would think that a younger generation of buyer would prefer to go online, to deal with the big box – but have a whole lot of interaction. But that just doesn’t seem to be the case.”
Rising number of new buyers good news for loan officers and brokers
Those improving prospects for first-time homebuyers, many of whom saw themselves frozen out of the housing market of recent years amid booming activity and skyrocketing home prices, are pointing to a strong outlook on the mortgage front for the coming years.
The value of a knowledgeable mortgage professional to steer homebuyers through the current market is coming into increasingly sharper focus, according to O’Neil.
“I definitely feel very positive about the outlook for the next couple of years,” she said. “I think really the best advice that I can give homebuyers is just to align themselves with a local mortgage broker or a real estate agent who will take the time to educate them on strategies to help them win.
“I think partnering with somebody who’s fully vested in your success and tapped into the local area will definitely benefit in any market – and again, that education piece is huge right now.”
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