When asked, most Americans who don’t own a home say they’d like to become homeowners someday. Regardless of current market conditions or the state of the economy, the desire to own a home endures. Part of this is because it helps to build wealth. The other part is homeownership’s long-cemented status as a key element of the American dream. So what’s keeping aspiring homeowners from pursuing their dream? Well, one main factor is coming up with a down payment. The down payment is among the biggest obstacles that keep people from buying. Mostly, this is because the traditional 20 percent down payment can be difficult to save. In fact, according to one recent analysis, someone making the median income and saving 10 percent of their earnings each month would take more than seven years to save a down payment on the typical American home. And, because home prices have grown faster than incomes over the past few decades, the amount of time it takes has been increasing. Fortunately, though, a 20 percent down payment isn’t required, depending on the type of loan you choose. Also, where you’re looking to buy will affect the amount of time it’ll take. For example, a down payment in Pittsburgh will take just 4.8 years to save, while in cities like Boston or Miami it can take twice that long. More here.
How Land-Use Regulations Affect A Home’s Price
The value of a particular house has to do with many different factors. The condition of the house, the location, the school district, supply, demand, and the surrounding neighborhood’s amenities are among some of the most well known. But a recent analysis has pinpointed another, less well known, factor that may help push prices upward. According to the study, areas that have stricter land-use regulations – such as density laws and permit review times – have seen much larger increases in home values compared to areas with less restrictive regulations. What does this mean? Well, it’s fairly simple. In areas where builders have a more difficult time building new homes because of local laws and procedures, fewer new homes get built. And, during times when there are a lower-than-normal number of existing homes available for sale, that can cause price increases to accelerate, as there will be more buyers than homes for sale. However, it’s important to note that the areas with the strictest land-use regulations also tend to be major coastal cities, where available lots are already hard to come by. In other words, there are a lot of factors that go into how a home is priced and the rate at which its value rises or falls. More here.