Even in this rocky real estate market, recent home buyers still feel their purchase was a good investment, according to a survey by the National Association of Realtors.
Some 78 percent of buyers said their home is a good investment, and 45 percent believe it’s better than owning stocks.
According to the survey, which covered home sales from July 2010 to June 2011, most buyers believe in the long-term value of home ownership — and the numbers support that. A home purchased nine years ago saw a median equity gain of 16 percent, while people who were in their homes for 11 to 15 years saw a median gain of 39 percent, the study showed.
Bryan Smith, president of the Commack-based mortgage broker Quality Financial Solutions, agrees that’s true for borrowers who bought their homes before the prices peaked and for those who did not take risky loans. “People still have equity if they bought property and it was prior to the bubble,” says Smith, noting that many of these borrowers are now successfully refinacing at today’s lower rates. The exceptions, he says, are those who took out large home equity loans during the boom.
The survey showed that recent buyers have higher incomes, and they’re making higher down payments than a year ago. The median down payment size for both repeat buyers and first-time buyers was a full percentage point higher than it was in the 2010 study. The median down payment for all home buyers was 11 percent, ranging from 5 percent for first-time buyers to 15 percent for repeat buyers.
“We still have a good amount of borrowers putting down 20 percent or more — even first-time buyers, not just move-up buyers,” Smith says. “Not because they have to, but because they want to and have the means to do so.”