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First-time home buyers facing challenges

Renovation at a home in Indianapolis
Posted at 6:36 AM, Mar 25, 2022
and last updated 2022-03-25 06:36:41-04

INDIANAPOLIS — Rent prices continue to rise. Some of the latest numbers show show rent hikes of more than 30% in several U.S. cites, and renters are feeling the squeeze. Some of them, like Kevin Brewster, say it makes financial sense to try and buy a home. In many cases, mortgages are cheaper and they allow the borrower to gain equity.

"I started looking about a couple months ago, looking for a house suitable for me. Single family. Nothing too big," Brewster said. "All the houses I've looked at, the next day, they're usually pending."

The trouble Brewster is having while looking for a house isn't uncommon according to Realtor Chris Brazis.

"My goodness. It's been a battle. Inventory is probably the lowest it has ever been," he said. "Homes are going live on Thursday and they're basically sold on Sunday night."

Brazis said on average, homes in Indiana are on the market around 24 days. However, that's the statewide average. For specific neighborhoods like Broad Ripple or Fountain Square, Brazis says the homes can go in a matter of days. There doesn't seem to be any relief in sight.

"I don't think it's going to let up at all. There's just so many buyers, not enough homes on the market," Brazis said.

Much of this housing market distress has been fueled by the pandemic. One part of it? Renters, who no longer needed to commute to work, had the option to buy homes in more affordable areas. Data from Zillow shows that was the case for nearly two million people.

It can help explain why now, among other reasons, there are hardly any single-family homes on the market. To try and combat this, people are rehabbing, renovating and selling older homes. This trend is happening all over the country but Brazis says there's a big reason why Indianapolis is a sought after market: lower tax rates in comparison to bigger Midwestern and coastal cities along with cheaper prices.

Brazis recommends home buyers be flexible in the type of home they want and the location. He also says you should be looking for homes cheaper than the amount for which you're approved.

That will allow you to have some wiggle room if the bank appraises the house at a lower price or if you have to offer more to compete with other buyers.

Despite the turbulent market, Brewster has been able to find a home he likes and is about to sign the purchasing agreement paperwork.