As more young professionals move to Detroit and the region, some are choosing to purchase homes instead of rent. Mark Stevens, regional sales executive for Bank of America Home Loans, talked with DBusiness Daily News about today’s profile of first-time homebuyers and where they’re choosing to put down roots.
1.DDN: What are first-time homebuyers facing, and where are they looking to buy?
First time homebuyers, or younger individuals, are really attracted to Midtown, Corktown, and the Riverfront (in Detroit), which is exciting. (By creating more demand) they’re driving rents up. And what happens traditionally as rents rise, that rent versus buy decision takes place, and I think you’re going to continue to see growth in purchases. As the city removes blight and continues to do the great things that they’re doing, we’re going to continue to see the youth move into the city.
2. DDN: What other areas are people buying their first homes?
When you look at metro Detroit outside the city proper, they’re sprinkled in all of the communities that are affordable. The city proper provides really reasonably priced properties for the most part.
3. DDN: Who is the average first-time homebuyer that you work with?
The average person is probably a college graduate between 21 and 29 years old. I think that that group is really gaining confidence in their income stream. I think they’re gaining confidence in what home ownership is all about and the value it’s going to play in wealth and growth in the future. So that range of people, they’re coming out of school with a little more debt than they had in the past. In the city itself, between 2010 and 2013, we’ve seen an increase in (21 to 29 year olds) in the city. The number of college-educated residents under the age of 35 has increased 59 percent. That’s impressive when you think of what the city has gone through.
4. DDN: What changes have you noticed with the average first-time homebuyer over the past few years?
My guess would be that the average age (of the first-time homebuyer) is going up. We went through a challenging time where the ease of credit tightened. Those with minimal incomes and zero down payments were challenged to get a new mortgage. I think just the fact that we went through those last five years, lending became very conservative and it did in fact impact first-time home buyers.
5. DDN: Do you think young people are more interested in buying a home than renting now?
It depends on the individual, but property values are pretty good and interest rates are incredibly low. I think what’s going to drive younger folks to really pay attention to new home ownership is just the fact that it may be a better monthly expense to them than renting a piece of property. If they feel confident in their jobs and they like where they’re at, they’re going to want to put down roots in that market area. I see a trend of growing home ownership because first-time homebuyer products are good. I think that it’s a stable environment for them to buy in