The Greater Las Vegas Association of Realtors has made news in recent months by documenting what has become a local housing shortage.
Since April, GLVAR has been reporting that the housing supply in Southern Nevada has been shrinking and is now down to less than a two-month supply of existing homes available for sale. GLVAR leaders say a six-month supply is a balanced market.
This tight housing supply presents challenges for people looking to buy a home.
“Homebuyers have to work harder than usual to find the right home for them in the current housing market,” Tina said. “A lack of homes on the market is certainly a challenge. And rising home prices are a factor, too.”
But one challenge that is often misunderstood or overstated, he said, is the amount of money buyers need for a down payment.
The National Association of Realtors recently reported that the median down payment for first-time buyers nationwide has been 6 percent for three straight years.
According to NAR’s Aspiring Home Buyer Profile, 87 percent of non-homeowners indicated that a mortgage down payment of 10 percent or more is necessary to buy a home. The Aspiring Home Buyer Profile also found that eight out of 10 would-be buyers indicated that owning a home is part of their American dream. Yet, Tina said the confusion about down payment requirements may be keeping some aspiring buyers from entering the housing market.
“One of the most common comments that people make, when it comes to buying a home, is that they can’t afford the down payment,” Tina said.
NAR research suggests that unrealistic expectations about down payments have kept credit-worthy borrowers with manageable levels of debt from looking into buying a home.
Every prospective buyer is different, but Tina said consumers should talk to lenders about their qualifications before giving up on their dream of owning their own home.
“People interested in buying their first home should gather their financial paperwork and sit down with a lender to discuss their qualifications,” he advised. “Talk to family and friends and people you trust to get recommendations about a good Realtor who can help you get started.”
For those renters out there who are ready to join the majority of homeowners who were able to buy a home with less than a 20 percent down payment, Tina offered these tips to get started:
1. Review your financial situation and personal savings to determine how much you can comfortably use for a down payment.
2. Visit a few lenders and seek a mortgage pre-approval to determine how much money you are actually qualified to borrow.
3. Find a Realtor and discuss your budget and needs. This will help your Realtor refine your search and only show you homes that are actually available and in your price range.
4. Rely on professional help from the experts. This includes a Realtor and your lender. The U.S. Department of Housing and Urban Development also has a state-by-state guide of homeownership and home buying assistance programs in Nevada and elsewhere available at portal.hud.gov.
Buying a home can be a challenging process — especially when the housing supply is this tight. But with a little work and a Realtor by your side, Tina said you can still find a good home here in Southern Nevada.
GLVAR was founded in 1947 and provides its nearly 13,000 local members with education, training and political representation. The local representative of the National Association of Realtors, GLVAR is the largest professional organization in Southern Nevada. For more information, visit LasVegasRealtor.com. E-mail your real estate questions to firstname.lastname@example.org.