April 13, 2024

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Real Estate News Briefs: 5/28/22 | Real Estate

7 min read
Real Estate News Briefs: 5/28/22 | Real Estate

Young South Carolina Homebuyers Are the 13th Least Likely to Need a Co-signer

After two years of high competition and fast-rising prices in residential real estate, the market is at last seeing signs of cooling off. Amid higher prices and recent interest rate hikes, demand is leveling out. Pending home sales have begun to decline, online searches, showings, and mortgage applications are down, and many experts anticipate a rebalancing in the market over the next year.

While many buyers may be starting to feel relief, younger buyers have had an especially difficult time in this market and may continue to struggle. The Millennial generation—Americans aged 26 to 41—are currently in their peak homebuying years, representing 43{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} of buyers according to recent data from the National Association of Realtors. Because they are earlier in their working lives, young shoppers may have less saved up to put toward a home, and they also tend to be first-time buyers, which means they do not have existing home equity available to help finance a purchase. While the market was at peak competitiveness, this made it harder to outbid buyers who had more resources at their disposal. Now, with home prices at historic highs and interest rates increasing, many young buyers are being priced out of the market altogether.







Young Buyers

Young buyers all over the country that are backed by an older co-signer are buying similarly priced homes compared to those of similar age who are not utilizing an older co-signer.




To overcome these challenges, some young buyers have relied on older friends and family members with more financial resources to support a home purchase. This can happen informally, like with gifts to put toward a down payment or closing costs, but support can also come in the form of a co-signer on a mortgage loan. 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 a loan application, this helps buyers with low incomes, more debt, or a patchy employment history increase their likelihood of qualifying for a loan and receiving lower interest rates or higher approval amounts.

Young buyers appear to be relying on older co-signers simply to enter the housing market, rather than using co-signers’ financial assistance to purchase more expensive homes. This is evidenced by similar property values and down payment amounts across young buyers with and without older co-signers, according to data from the Home Mortgage Disclosure Act. The median property value and down payment for young buyers with an older co-signer is $295,000 and $40,000, respectively, compared to $285,000 and $30,000 for all young buyers. But both groups of buyers lag behind typical figures overall: for all buyers, the median property value is $325,000, and the median down payment is $50,000.

Co-signers are especially helpful to young buyers in markets that tend to be more expensive for housing. There is a positive correlation between median home price in a state and the percentage of young buyers with an older co-signer. The three states with the highest percentage of young buyers who have a co-signer—Hawaii, Colorado, and California—respectively rank first, fifth, and second in the U.S. for overall home prices.

Due to the relationship between home prices and the presence of a co-signer, states in the West and Northeast that tend to be more expensive also tend to have younger buyers relying on co-signers more often. In contrast, more affordable states in the Southeast and Central U.S. have fewer young homebuyers with a co-signer.

To determine the states with the highest percentage of young homebuyers with an older co-signer, researchers at Porch analyzed the latest data from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. The researchers ranked states by the percentage of young homebuyers (34 years old or younger) with an older co-signer (55 years old or older). In the event of a tie, the state with the higher median property value for young homebuyers with an older co-signer was ranked higher.

The analysis found that in South Carolina, 0.746{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} of young homebuyers have an older co-signer on their mortgage loan, compared to 0.915{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82} at the national level. Out of all states, South Carolina has the 13th fewest young buyers utilizing an older co-signer. Here is a summary of the data for South Carolina:

• Percentage of young buyers w/ an older co-signer: 0.746{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82}

• Median property value for young buyers w/ an older co-signer: $210,000

• Median property value across all young buyers: $225,000

• Median down payment for young buyers w/ an older co-signer: $20,000

• Median down payment across all young buyers: $20,000

For reference, here are the statistics for the entire United States:

• Percentage of young buyers w/ an older co-signer: 0.915{73375d9cc0eb62eadf703eace8c5332f876cb0fdecf5a1aaee3be06b81bdcf82}

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• Median property value for young buyers w/ an older co-signer: $295,000

• Median property value across all young buyers: $285,000

• Median down payment for young buyers w/ an older co-signer: $40,000

• Median down payment across all young buyers: $30,000

For more information, a detailed methodology, and complete results, you can find the original report on Porch’s website: https://porch.com/advice/young-buyers-relying-older-co-signers-buy-homes

New Agents at Realty One Group Coastal

Realty One Group Coastal welcomed three new agents in the past month: Kate Joiner, Megan Jean Poston and Paula Odell.







Joiner

Joiner




Since she was young Kate Joiner has enjoyed shopping for houses online – whether she was in the market to buy one or not. It didn’t long for her to realize that she should turn that passion into a career. As she begins her new role at ROGC she is excited to combine her love of real estate with her love of Charleston while helping you find the home that checks every box! Fun fact: Kate is also a RN, mother of three, experienced short-term real estate investor, and is currently acting as her own general contractor while custom building her dream home. Whatever your needs are in a real estate agent, Kate has the versatility and tenacity to meet them.

Kate Joiner 7046205001 [email protected]







Jean Poston

Jean Poston




Megan Jean, Realtor at Realty one group coastal is excited to advance her career in real estate here in the Charleston area market. She has lived and purchased several homes over many years in various states which adds to her impressive knowledge and work ethic to provide the highest quality care and diligent work ethic for her variety of clients. She has lived in the Lowcountry since 2008. Her love for life in the Lowcountry has only been enhanced here as an outdoor and food enthusiast, along with enjoying all the blended cultures located only here and the true beauty of the Charleston area. As a mother of three and social media networking guru, she has vast experience in negotiating, time management and passion beyond comparison. Her marketing background, as well her veterinary technician background, enhances her abilities as a real estate agent to provide more exclusive insight, attention to the needs of her clients, diverse details as just like in veterinary medicine, no two animals are the same- no two houses or clients are. She is passionate and a true professional about finding that exact marketing strategy for your specific home or investment property which is one of those extensive additional qualities she provides above her caring nature and business mindset. Her love for real estate is one of those found few and far between. She is driven to go above and beyond for her clients to get the right property. The right house can change a family or somebody’s world and that’s as great a feeling as an agent can provide! Reach out to Megan Jean today.

Megan Jean Poston 662-420-8385 [email protected]







Odell

Odell




Paula Odell was a military brat so she understands all too well how stressful relocating can be. In 2003 she came back home to Charleston to raise her boys and plant her roots. Odell was running a successful cleaning business since 2004 until deciding to pursue her passion for Real Estate. Filled with a love of helping people and building relationships, Paula’s knowledge of the area ensures her ability to help her clients find the home that is the perfect fit for them. If you are relocating to the area she would love to be your feet on the ground to help make the process as smooth as possible. With the support of an amazing brokerage with an extensive local and international marketing database, together they can get you the most amount of money in the least amount of time. If you are ready to sell, buy or have any Real Estate questions please give her a call.

Paula Odell 843-532-6304 [email protected]

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