The best way to increase the number of qualified homebuyers is to lower the screening parameters. It’s a taboo idea but there really is no other viable way to increase home ownership.
In order to accomplish this goal, you have to hedge your risk, as a homeowner or investor, while simultaneously providing a sound, yet flexible opportunity for first-time buyers. I’m not talking about subprime loans. That just postpones the inevitable flood of banking fees.
The best approach is to reduce the fees.
Qualified homebuyers exist not only because of job stability, but because of equity they acquired in their existing home. And they were able to do that because the market was growing. It was a completely different culture when most of the current homeowners bought their first house. Now that the best of times seem to be behind us, we need another approach.
To help young graduates take baby steps towards ownership, let’s get them in the door of a home, instead of an apartment. Let’s let them see how much property taxes are and how much maintenance fees cost. These things should be taught, not stumbled upon.
Then they will learn how to budget their income because of the experience, not because they did everything perfectly or had a 6-figure income. And they can gain experience if we adopt an easier method of entry rather than the current platform. Giving more people the chance to earn equity creates more qualified buyers. Which, in turn, increases everyone’s chance of selling our houses quickly.
Don’t think it’s possible? It is. Let’s do it together.