Chad and Mia sit across from each other at their small kitchen table, an array of papers and a laptop between them. They are sifting through listings, their heads swimming with prices and details.
“So should we make an offer on any of these?” Chad sighs, rubbing his eyes and running his hands through his hair in frustration. Mia shrugs her shoulders slowly and says, “I don’t know. Every time we find a house we like, it’s gone within days. It’s starting to feel like we’re wasting our time.”
Chad leans back in his chair, his fingers tapping rhythmically on the table. He looks at Mia, noticing the tired lines around her eyes. “We need to take a break. Let’s walk around the block and clear our heads.”
The crisp autumn air greets them as they walk hand in hand around the neighborhood they have rented a home in for the last three years. A neighborhood they love. A neighborhood in which they would love to own a home and start a family.
“Remember when we first talked about buying a house here?” Mia asks, breaking the silence.
“Of course I do,” Chad says. “We were so optimistic. We thought by now we’d have bought the perfect home in this neighborhood.”
Mia is silent for a few seconds, then quietly laments, “And now it feels like we’re just looking for any home in any neighborhood…”
This is a common situation for many first time homebuyers in our country right now. It’s hard enough for younger, first time buyers to come up with down payment money, but when you add 7% interest rates and scarce inventory to the equation it can make the “American dream” feel like an impossible dream.
Back in June 2021 I published an article called Rental Nation in which I said, “Currently, about one out of four homes is selling to an institutional investor (one of three in Phoenix)…It’s become increasingly difficult (and sometimes impossible) for middle class homebuyers, like young couples and families, to compete with corporations that pay full market value, waive appraisal, have no loan contingency, and can close whenever sellers choose. They even let sellers stay and rent their home back for months or years.”
This trend has persisted. A few months ago BusinessInsider.com published an article with the headline Investors bought a record 26% of the affordable houses in the US last quarter and went on to say “Single-family homes accounted for more than two-thirds of investors’ purchases in Q4 of 2023, at 68.6%.” The article also said “A lot of people want a cheaper home, but they’re hard to come by in this market. Homebuyers looking for an affordable house or a so-called starter home might be crowded out by investors who are also on the hunt.”
But it’s not just about first time homebuyers capitalizing on the American dream, or increasing net worth, or experiencing the pride of ownership. It’s much bigger than that.
More homeowners create a prettier America. Neighborhoods with a majority of owned homes look better when compared to neighborhoods of mostly rented homes. Homeowners tend to take better care of their homes than renters do.
More homeowners create a more stable America. Because homeowners tend to stay in their homes longer than those who rent homes, it creates more stability in housing.
First time homebuyers not only fuel the real estate industry, but a large number of sub-industries as well, like plumbing, electrical, tile, stone, roofing, pools, landscaping, etc. Furthermore, those industries fuel other industries that make the raw goods those contractors use, so the positive reverberating effects of a first time homebuyer purchasing a home are huge.
In addition, first time homeowners increase their net worth more rapidly and have more money to spend on restaurants, cars and other things that seemingly wouldn’t have anything to do with real estate. People who have more money tend to spend more money, which means the American economy gets stronger too.
At the end of my Rental Nation article I suggested the way to fix this first time problem would be through smart, common sense legislation. A few weeks ago I published an article titled A Letter to the Governor in which I praised Arizona Governor Hobbs for her initiative to help 500 first time homebuyers with down payment and interest rate assistance.
Heeding the call, I rounded up a group of my best 72SOLD agents across the state to provide free representation to help these buyers in the new program purchase a home. In the letter I pledged: “This means homebuyers in the program will have the opportunity to receive a cash credit at closing of the entire commission that their 72SOLD Realtors would have earned. This should make purchasing a home even more affordable.”
Buying a first home shouldn’t be a privilege in this country… it should be a priority. When it comes to a beautiful America, a stable America, and a prosperous America, let’s recognize the significance of first time homebuyers.
