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Fewer First-Time Homebuyers
CEDAR RAPIDS, IA (CBS2/FOX28)- The housing market is seeing a lower number of young first-time homebuyers.
According to the National Association of Realtors, recent graduates are struggling with buying their first home due to high student loan rates.
With that being said, many recent college graduates are not getting approved for home loans.
"I have a young first-time homebuyer and we had to visit 5 different banks," Heather Morris said.
Morris said she has see more potential young homebuyers saddled with college debt get turned down for a mortgage.
"Creative financing has definitely become a staple for new buyers or buyers who are carrying student load debt," she said.
Skogman realtors are taking their clients to "local" banks and credit unions.
She said they're often an easier alternative to national banks for financing a new home.
"Boutique loans through credit unions have become more popular because with a decent credit score and lending, they'll be more forgiving,"
A scenario that one local officer sees on a weekly basis.
"We have to factor in with guidelines, that payment on the student loan which does affect their ability to buy a house," Nathan Seyfer, UICCU Mortgage Loan Officer.
Seyfer said every profile is different but even if a potential homebuyer is making their monthly payments, they may still not get approved.
"We look at things on how we can get someone approved," Seyfer said.
He said he has a client who has debt from law school. Luckily, Seyfer said the mom and dad are willing to help co-sign.
Seyfer said co-signers and paying off some of that debt could help increase the chances of being approved.
"As long as they are candid with us, we try to find a way," Seyfer said.
Young homebuyers can also look into the Roots City Program or MCC tax credit to help buy a new home.
Other factors that also contribute to the decline of the first-time homebuyers include uneployment rate and lower wages.