Akron Life November 2023

“ The more barriers associated with homeownership that can be eliminated the better. —Mark Vi tt ardi

homeownership. For others, the high price of homes these days also seems like a brick wall. (First-time buyers currently make up make up 26% of all homebuyers — a decrease from 34% in 2022, according to the National Association of REALTORS® (NAR), of which ACAR is an af fi liate.) Obstacles also include the current low inventory of existing homes on the market, according to Gaebelein. In addition, not enough new construction is being com pleted by builders valiantly trying to keep up with the housing demand, but who are hampered by lack of skilled workers, some vital materials shortages and high costs. But one barrier in particular looms large for many buyers — the lack of a suf fi cient down payment. According to NAR, about three-fourths of all potential homebuyers say they are planning to save for a down payment and most say it will take between six months and three years to save. But mil lennials are worried. Four in 10 people in that age group said they didn’t think they could save enough for a down payment. ACAR is working with communities, lenders and homebuyers to ensure that bar rier is lessened. “The percentage of a down payment isn’t necessarily higher than it has been in the past. But the value of homes has gone up, so the amount of money has increased,” says ACAR Board Member Jeannet Wright, a REALTOR® with FASS Real Estate Services in Cleveland, who says that down payment percentage (depending on the loan type) can usually range from 3 to 3 ½ % of the purchase price. ACAR recently commissioned the Akron Housing Affordability Study, a spotlight on the largest city in Summit County, but which is also a re fl ection of what is hap pening in many other cities. The study was created by Anderson Economic Group, a research and consulting fi rm in Chicago.

According to ACAR's Vice President of Government Af fairs Jamie McMillen, “the

study suggests that down payments and closing costs may be a contributing factor to why less than 12% of households earn ing $30,000 or less are homeowners, de spite being 40% of the city’s population.” “The more barriers associated with homeownership that can be eliminated the better,” emphasizes ACAR President-Elect Mark Vittardi, a REALTOR® with Century 21 DePiero and Associates in Parma. “And the way we do that is through our associa tion’s leadership. “That way if a city or town has a real es tate issue, it can look to ACAR to get the information they need before they make a decision that might have a negative effect.” THERE IS DOWN PAYMENT HELP OUT THERE Ohio REALTORS®’ 2023 President-Elect. Ali Whitley is a REALTOR® and director of education and training for RE/MAX Cross roads Properties in Fairlawn. Whitley sees more initiatives at the local, state and na tional levels. “Sometimes people come out of school with serious college debt. They have excellent earning potential, but they haven’t had the opportunity to build up that down payment yet,” says Whitley. “Down payment assistance would be the perfect opportunity for them. It would be fantastic if all communities had some sort of down payment assistance.” In addition to a down payment, Wright reminds homebuyers that they are gener ally responsible for closing costs (about

3 to 6% of the loan amount), home in spections, appraisals and insurance. She also debunks the misconception that a 20% down payment is mandatory to buy a home. It can be a lot less if government programs, community economic-develop ment assistance and/or lenders’ programs are utilized by eligible applicants, she says. Some loans, including several from the VA and USDA, require no down payment. Wright also says more buyers should tap into overlooked personal resources that may be underutilized for down payment funds. Those can include signi fi cant funds from income tax returns or money saved that once was earmarked for a car payment. HOMEOWNERSHIP PROVIDES BENEFITS FOR HOMEOWNERS AND COMMUNITIES Numerous studies over the past decades have suggested that people reap many ben e fi ts as homeowners — fi nancially, socially, emotionally and health wise. Homeowners can build strong credit histories and wealth over time and bene fi t from tax incentives. Communities also bene fi t from home owners who are more civically engaged and who make more property improve ments. Neighborhoods of homeowners have a lower crime rate than those of rent ers because there are more ties to the area and more incentive to deter crime. “Homeowners put down roots. They stay in communities longer than renters,” ac cording to Whitley. “Homeowners are able

DREW GAEBELEIN

JEANNET WRIGHT

MARK VITTARDI

ALI WHITLEY

ISTOCK / COURTESY ACAR

Akron Cleveland Association of REALTORS ® ACAR 3