HONOLULU (KHON2) — The homebuying market is getting more competitive as we inch closer to summer. This comes after two years of high competition and fast-growing prices in residential real estate.
Despite summer being the busiest time for home buying and selling in Hawaii there are some signs of the cutthroat market starting to cool off. Pending home sales have begun to decline, online searches, showings, and mortgage applications are down nationwide.
Some home-buying experts believe a rebalancing in the market could come over the next year. This is especially good news to young first-time homebuyers who may struggle to save up enough money for a down payment.
The Millennial generation, those 26 – 41, are in their peak homebuying years, representing 43% of buyers according to the National Association of Realtors.
However, one thing that seems to have stuck especially in Hawaii is the high price for a single-family home. Which could make home-buying out of reach for some younger Millennials.
This is due to Millennials being so early in their career, with some still holding substantial student loans, not having enough income to offset their debt and save up a significant amount for a down payment.
One quick work around for younger homebuyers is having a older friend or family member help financially support a home purchase.
A new study by Porch ranked the states with the highest percentage of new homebuyers rely on co-signers. Hawaii came out on top coming in first place for having the young homebuyers using a co-signer.
Porch said co-signers are people who agree to be responsible for loan payments if the primary signer defaults. Because co-signers’ financial resources and credit history are also evaluated as part of the loan application, this can help buyers with low incomes, more debt or a patchy employment history to increase their likelihood of qualifying for a loan.
According to Porch’s study, the median down payment across all young buyers in Hawaii is $80,000. The median down payment for young buyers with an older co-signer is $100,000. The Median property value across all young buyers is $555,000.
States with the highest number of co-signers assisting young homebuyers are Hawaii, Colorado, California and New York.
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To read the full report done by Porch head to their website.