The real estate market has a strong effect on how people live their lives and students should inform themselves as they prepare to one day be homebuyers.
The subject of real estate can be scary to anyone looking to buy their first home. America’s suburbs are expanding rapidly, and cities are not getting any smaller. The best way to start navigating the housing market is by making a plan.
The first step in getting into real estate is figuring out how the market functions. There are people needing homes, and there are people selling homes. Simple in concept, complicated in practice.
Simply put, someone wanting to buy a house finds a place they like and buys it. Typically, an intermediary known as a real estate agent or realtor is involved as well. They are the ones who facilitate the deal while working with the owners and buyers to ensure everything goes smoothly.
This works fine until a prospective buyer figures out the current cost of doing this. Right now, the “The national average thirty-year fixed mortgage rate… is 7.23%.” This rate has been steadily growing this year along with “the median existing-home sales price also [breaking] through $400,000 for the first time in 2023, hitting $410,200,” according to Forbes.
According to the National Association of Realtors, the current rising mortgage rates paired with the second-highest average new-build prices ever recorded are cause for concern. On top of this, the US average family income has only risen about seven thousand dollars since 2020 while the average price of a new home has risen by $116,000.
The best thing for students to do now is stay knowledgeable about their options. Kennesaw State has a real estate club, Real Estate Society, and they bring in speakers to educate students who want to get into the business as well as students interested in learning about the market in general.
The club recently had a speaker, realtor Jason Fleeman, who discussed “house hacking” as well as the strategy of “living under your means” as a way to save money. Both of these strategies are possible for current students but are most likely more possible with soon-to-be graduates.
According to Fleeman, “house hacking” is getting a mortgage for a house and renting out unused rooms; in essence, this will lead to roommates paying off the mortgage for you while you still get to live in a house. This strategy does require finding a house with a reasonable mortgage payment as well as having the ability to put a down payment on a property, but especially as someone who’s working after graduating, this can be a good way to save up for a personal home.
For someone young and making money, it is a wise idea to live somewhere with a rent that is easily affordable, this way, one can start investing/saving for a permanent residence according to Fleeman.
According to Forbes, the housing market is getting expensive, and the supply of houses, especially entry-level, is not going up. With this in mind, students need to keep in mind that their first home will probably be smaller than they think, or their first home may even be an apartment. Location also plays a big factor in this equation since trends vary all across the country.
In this day in age, information is everywhere. Students have access to different newsletters and current reports that it can be overwhelming, so that is why it is important to take a deep breath and understand that there are people out there to help. Clubs such as Real Estate Society help students get introduced to these new concepts as well as connect them with the people who really know what is happening.
Finding the right people to help on the journey while having baseline knowledge about the subject will ensure a more peaceful experience in the search for a home sooner rather than later.
