New York housing sales are stable despite concerns to the contrary. State-provided funding for first-time buyers of condos, family homes, and co-ops help make buying and homeowners insurance more affordable than ever.
There’s been some debate over the condition of NY’s housing market in the past few years. The New York Times reported a decline in new homes bought back in 2018, and a slowdown in new home construction at the end of the year caused some housing sector analysts to worry about a trend toward renting. But data from both the National Association of Realtors (NAR) and the Consumer Credit panel of the Federal Reserve Bank of New York say these figures don’t tell the right story. The market and a host of state-sponsored programs present a great opportunity for New Yorkers to buy a first home.
First-time buyers lead the market
Federal Reserve data proves first-time home buyers have been out in force, comprising 46 percent of new purchases in 2016 (the most recent year available for their data). Figures published by the New York City Rent Guidelines Board for the following year show the number of permits issued for new construction of housing units increased for the seventh time in eight years. More recently, NAR reports show sales bouncing back in May 2019.
Far from a downturn, the percentage reported by the Federal Reserve represents the highest number of first-time home buyers since the 2005 to 2007 housing crisis. And the National Association of Homebuilder’s data shows that 56.6 percent of new and existing homes sold at the close of 2018 were affordable for mid-income families.
State programs designed to make first-time buying more attainable are a major contributor to the healthy demand for entry-level homes.
The financial support available for first-time home buyers in New York
The HomeFirst Down Payment Assistance Program is available in all NYC boroughs and offers as much as $40,000 to qualified first-time buyers. This money can be used for either a down payment or closing costs. Buyers can qualify by taking homebuyer education classes.
Those classes provide a certificate valid for six months toward achieving this forgivable loan (further eligibility requirements are listed in the term sheet). Other sources of financial assistance are also available, including:
- The State of New York Mortgage Agency (SONYMA) offers down payment assistance with no credit score requirement for mortgage programs.
- A Housing Opportunities Foundation grant offers up to $2,000 toward closing costs or a down payment and is applicable statewide.
- The NeighborhoodLIFT program helps first-time buyers in the Bronx, Brooklyn, and Queens by offering up to $20,000 as a 5-year forgivable loan.
- Residents in Albany can apply for the ACRHA Acquisition/rehabilitation grant which can provide up to $14,900 for purchase and repairs of a new home.
There are further funding options depending on where you intend to buy. The financing is there to help New Yorkers, but will first-time buyers be willing and able to get the insurance these properties need?
How to make homeowners insurance more affordable
All of this financial support is encouraging for New Yorkers ready to invest in their first home. If they qualify, it means they save more money and are in a much better position to afford a home insurance policy.
Some New Yorkers may feel that homeowners insurance is unnecessary since it’s legal to own a home in the state without a policy. Mortgage companies see the matter differently, and many won’t even deal with first-time buyers who don’t have standard home insurance (and sometimes additional flood insurance) in place. Even if you find a mortgage lender willing to overlook insurance, it’s still in your own best interests to have it.
We recently talked about why it’s never too early to put this coverage in place, including issues which may affect premiums, like marital status and the age of the home. We also highlighted the 4 key coverage areas of homeowners insurance to show what is and isn’t protected. Take a look at those posts for more information about why all homeowners really should have an insurance policy on what is likely your single biggest investment.
New York is already among the most affordable states in the country for home insurance. A $200,000 policy with $100,000 in liability coverage and a $1,000 deductible, on average, could cost just $935. That’s 23 percent less than the national average. Considering the financial aid first-time buyers have access to, now may be a great time to buy and protect your new investment with an insurance provider you can trust.
NICRIS Insurance can help first-time homebuyers find the coverage best suited to their specific needs and those of the property. It’s easy to over- or underinsure yourself, or underestimate risks like New York’s ever-worsening weather, so our experienced team reviews every client’s personal circumstances to find the best deal possible.
NICRIS Insurance provides a free, personalized review or you can connect with us by dropping us a line!