With housing prices in Maryland continuing to climb, industry experts say it has become increasingly difficult for first-time homebuyers to purchase a property.
According to a study released Tuesday by the Maryland Association of Realtors, the median price for a starter home in Maryland rose by nearly $5,000 in June to $272,638, compared with $267,753 in May.
“I think the primary reason we?re continuing to rise is we started at a lower base than some of the surrounding areas such as Northern Virginia, so we haven?t seen the dramatic correction those regions have seen,” said Al Ingraham, president of the Maryland Association of Realtors. “Plus, we have a lower unemployment rate than other areas and that continues to stimulatethe economy.”
Even with higher prices statewide, Ingraham said with the help of some government-funded programs, buyers won?t necessarily be priced out of the market.
Shannee Maynard, a phlebotomist with Quest Diagnostics, who purchased her Glen Burnie home last month, said without the assistance of Anne Arundel Community Development Services, the county?s housing and community development office, she would not have been able to purchase her home. To help her with the down payment and closing costs, the office provided her with about $40,000 after she completed a homeownership counseling program.
The money given to her was administered as a lien on the house that must only be repaid if and when the house is sold, said Kathleen M. Koch, the organization?s executive director.
She said the office offers two different funding programs, one of which provides up to $40,000 to homebuyers 80 percent and below the median income level and up to $10,000 for people up to 120 percent of the median income.
“These are needed programs because when people are paying rent it?s very difficult to save up for the closing costs and down payments,” Koch said.
Meanwhile, a state program that has seen increased interest among potential homebuyers is the “More House 4 Less” program, said Sam Whatley, a real estate agent at the Coldwell Banker Residential Brokerage branch office near Baltimore/Washington International Thurgood Marshall Airport.
“These programs are designed to help people who otherwise would be renters for the rest of their lives to own their own homes,” Whatley said.
Under the program, which is offered by the state?s Community Development Association, an arm of the Maryland Department of Housing and Community Development, CDA loan-approved customers are entered into the Downpayment and Settlement Expense Loan Program, which currently provides a $5,000 interest-free loan that is repayable only when a home is paid off, refinanced or sold.
Whatley said the loan amount fluctuates depending on how many people enter the program in a given month.
For Yolanda Green, a community affairs assistant with the Federal Deposit Insurance Corp., the $10,000 DSELP loan she received to purchase her Hyattsville home sped up the time frame in which she would have been able to purchase a property otherwise.
“It?s a very good program,” she said. “I loved it because I really didn?t have to put anything down.”
CDA loans
» 30-year fixed rate mortgage loan
» 40-year fixed rate mortgage loan with no minimum borrower contributions
» 30-year fixed rate mortgage loan with interest-only payments for the first seven years
» 35-year fixed rate mortgage loan with interest-only payments for the first five years
» 40-year fixed rate mortgage loan with interest-only payments for the first seven years
For more information
» For more information on the state?s Community Development Association, call 1-800-638-7781. To contact Anne Arundel Community Development Services, call 410-222-7600.
