First Time Home Buyer? Avoid These States
Your first home buying experience is much like getting married. As the wedding day approaches you grow more excited at the thought of taking one of the biggest steps in your life with your loved one. At the same time, it’s normal for anxiety to creep in when you consider the responsibilities of being a spouse.
Similarly, there’s nothing better than knowing you’ll soon be the owner of your first home. A place to call your own and either raise a family in or enjoy while you save up for a better home. Of course, this step also comes with its fair share of elements that can make it a stressful experience.
Now more than ever, potential first-time homebuyers are facing tough times in certain states. If you’re considering purchasing your first home soon, we recommend you avoid the following states:
California
Sunshine, beaches, and no shortage of activities to enjoy. Though not perfect, it’s no secret that The Golden State is one of the most desirable places to live in America. Unfortunately, it’s also the worst state to try becoming a first-time homebuyer in today.
According to Bankrate.com, California is tough right now for a number of reasons. For starters, rising home prices are making it a challenge for millennials to save up for a down payment. It doesn’t help when older folks with built up equity come along to buy them at a disadvantage.
California is also suffering high unemployment rates, particularly in the ages between 25 and 34, along with one of the highest state income tax rates.
Hawaii
Hawaii is another one of those states where you’d be hard-pressed to find any young home owners. In fact, the percentage of owner-occupied housing is the lowest in America. of all the homeowners, only 20% are at an age below 35. Those who do own their own property use 40% of their median yearly income toward paying for their home.
It’s also one of the worst states when it comes to availability of inventory, which has been a problem nationwide for the last decade or so. The lower-end of the housing market in Hawaii has suffered the most, which is exactly where first-time buyers look to purchase a home they can afford.
The main reason for this is because many starter homes were absorbed by investors after the housing crisis. So if you were hoping to start your life as a homeowner in The Aloha State, prepare for a difficult road.
Hawaii is home to one of the most shocking housing statistics: Locals pay a staggering 38.3 percent of their median yearly income for their homes, the highest in the country. Only 20.2 percent of younger households own their homes, the lowest among the states.
New York
New York is another one of those states where many young people dream of living. Parties, galleries, musical and theatrical performances— there’s no shortage of things to do. And then there’s New York City, the cultural capital of the world.
Sadly, New York is also far from recommendable to people looking to buy their first home. It only beats Colorado, Texas, and California when it comes to availability of homes for sale. With that kind of market, millennials are forced to compete for houses that cost more than they’re worth and come with a price tag they can barely afford.
It’s then no surprise that only 23.5% of under-35 households are homeowners— 10% lower than the national average.
Honorable Mentions
Louisiana
The high unemployment rate among millennials is bad enough. Add to it a high home loan rejection rate of 14.1% and you’re looking at a tough state to become a homeowner in.
Mississippi
Mississippi also suffers from one of the highest home loan rejection rates in America (more than 16% are denied) along with a very high unemployment rate among people between the ages of 25 and 34.
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Want to read more about where to purchase your dream home? Find out the top 5 safest places to start a family.