Metro Columbus home pricesRecent studies by Bankrate and Zillow show that first-time home buyers are renting for about 6 years before buying a home, a trend that has been on the rise since the mid-1990’s. Prior generations of first-time buyers waited about 4.5 years to buy a home. The shortest rental period belongs to the early 1970’s, when renting for about 2.5 years was the norm.

Today’s first-time home buyers are also older than prior generations, with a median age of 32.5 to 33 years old. This has been relatively consistent since the early 1990’s. The youngest median age group of first-time buyers was 29, back in the mid-to-late 1970’s.

It’s interesting to note that mortgage interest rates were much higher back when first-time buyers entered the market earlier. There were also fewer first-time buyer loan programs and incentives during the same period. Why, then, is it now taking longer for renters to become home buyers?

One of the reasons that today’s buyers are waiting longer to enter the market, is that home prices have been gaining ground faster than incomes. The price-to-income ratio currently stands at 2.6%, meaning that homes are costing 2.6 times a buyer’s annual income. At the market peak in 2005, the ratio was even higher at 2.8%. In the mid-1980’s, the ratio was 1.9.

Another factor in delayed home ownership might be simple prudence. Millennials haven’t been in a hurry to buy a home compared to prior generations. However, when they do buy homes, they are marking larger down payments and buying homes in higher price ranges. This could indicate that young adults are making deliberate, well-planned home buying decisions that take long-term ownership into account.

Please keep in mind that national studies cannot speak for local market conditions. Home buyers in Central Ohio have excellent opportunities in the market! Columbus has been named as one of the “easiest places to buy a home” in 2015. It has also been ranked as one of the “best bets for first-time home buyers.” Columbus offers a healthy economy and an attractive quality of life, and our home prices are within reach of median incomes. See our prior blog post about Buyer’s Markets in the Columbus Metro for examples!

Another advantage to Central Ohio home buyers is the availability of Exclusive Buyer’s Brokers! As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax