Data: First-time home buyers in area fall below income needs

First-time buyers in the core Orlando market are hovering below the brink of being able to afford what the real estate industry considers a typical starter home, a new report shows.

In January, median home prices dipped 2 percent from a month earlier and sales took a typical January dive, but entrylevel buyers struggled as interest rates climbed and wages stagnated, research by Orlando Regional Realtors Association shows. Starter homes have been beyond the reach of typical first-time buyers in an area of mostly Orange and Seminole counties during the last two months, according to the association’s monthly reports.

“Everything we’ve seen is just way more than we can afford,” said newlywed Traci Petersen, who works as a receptionist in Winter Park and has house hunted in the pockets of south Seminole County for months.

Orlando first-time buyers in December earned about $500 less than the $40,184 they need to qualify for a mortgage on an entry-level house with a price of $195,500, according to an Orlando affordability report using federal guidelines. While wages in the area grew about 5 percent during the last year, starterhome prices ramped up by more than double that amount. First-timers’ monthly homeloan payments edged up $20 to $837 and down payments grew by about $500 to reach $19,550 by the end of the year-long period.

Petersen said saving up for a 6 percent down payment has been difficult while living paycheck to paycheck.

Lou Nimkoff, president of the association, said affordability for first-time buyers in the core Orlando market edged up slightly in January from December but rising interest rates and lack of affordable houses on the market has challenged buyers. The good news is that high employment levels are likely to drive some wage growth, added Nimkoff, broker with Brio Real Estate Services LLC.

“I think we have had stagnant wages,” he said. “I think there’s been more and more wage pressure as we’ve had what people refer to as ‘full employment.’ ”

Real estate associations throughout the state have lobbied the Legislature to dedicate all state dollars earmarked for affordable housing toward helping buyers. For about the last decade, lawmakers have redirected part of that money to operate state government.

As the spring sales season nears when more homeowners typically list their houses on the market, greater opportunities should arise for buyers, Nimkoff added.

Overall for the area of mostly Orange and Seminole counties, the inventory of listings has dwindled by about 11 percent from a year ago and dropped more than 1 percent from a month earlier. The supply of houses on the market in January was 3.42 months, which is almost half of what is considered a balanced market.

Even with the shrinking inventory, median prices dipped 2 percent from December to January, when they reached a midpoint of $225,000. From a year earlier, prices are up more than 12 percent.

Sales generally plummet in a new year ,and this year was no different with 2,225 January sales, which was down 27 percent from a month earlier and flat from a year earlier. Sales by county from a year earlier were mixed throughout the region: Lake, down 7.9 percent; Orange, down 1.5 percent; Osceola, up 4.8 percent; and Seminole, up .6 percent.