According to research recently conducted by Wallet Hub, Murfreesboro and Nashville are considered two of the “Best Cities for First-Time Home Buyers” out of 300 cities in the United States. Murfreesboro comes in 28th among all cities, placing it in the top 10%, and Nashville comes in 16th on the list of cities with a population of more than 300,000 people.
“WalletHub compared … cities of varying sizes across 22 key indicators of market attractiveness, affordability and quality of life,” says their report. “Our data set ranges from the cost of living to real-estate taxes to the crime rate.”
While the percentage of first-time homebuyers fell to 32% from a historical average of 40%, according to Realtor Magazine, this group still makes up almost one third of the market.
Rising home prices and interest rates are making the purchase of a new home difficult, however, there are pockets where first time home buyers can still find a home they can afford, if the buyer goes into the venture with reasonable expectations and a willingness to compromise. First time home buyers will have to see that that first home may not be their “dream home.”
“The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward, but they also have a lot of housing choices as well as low crime rates and good schools,” according to WalletHub Analyst, Cassandra Happe.
Duong Katie Pham, Ph.D., Associate Professor, Department of Finance, Georgia Southern University, explains that the cost of owning a home is not just the cost of the mortgage.
“When you prepare for your first home purchase, calculate the purchase price you can afford and set the price range realistically,” said Pham. “This is often called the ‘Affordability Calculator’. A reverse calculation allows home buyers to foretell the type of home they can afford given a rough estimate of their current debt and monthly spending. This helps home buyers avoid overspending and avoid putting themselves into avoidable financial constraints.”
Phan suggests having a stable job for at least two years and having enough savings to make a 10% to 20% down payment, however local REALTOR Jonathan Harmon thinks that in the current market it is better to have about 30% of the purchase price in savings so that after paying for all closing costs, there is enough left in savings to make any necessary or desired repairs and adjustments to the home.
“No home is just the way we want it,” says Harmon, “there is always some issue that arises or some change the buyer wants to make to put their stamp on their new home. Having additional savings allows the new homeowner to make those changes before they move in.”
According to a recent market report by John Jones Real Estate (JJRE) there was an unusual influx of nearly double the active listings in the $250-300K price point in recent months, a price point currently considered for first time home buyers. It is a trend the company thinks is worth watching.
The recent JJRE market report also notes that there was a significant home supply increase in July, with a 64% rise compared to last year and a 39% increase from the previous month. This includes a mix of new and older homes.
A good sign for first-time buyers reported by the Nashville Association of Realtors is an increase in confidence in the market by first-time buyers. Their August report shows an increase in first-time home buyers in July over recent months.
While the market is in constant flux, with a good real estate agent, strong savings and a realistic view of the market, first-time home buyers have been able to make viable offers and find homes in recent months in the local area.
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