First-Time Boomer Home Buyers

What first-time Delaware homebuyers should know when looking for a home.

First Time Delaware Boomer Buyers - What you need to know to buy your first home in Delaware.

At what age do people buy their first home? National statistics say that eighty-one percent of Gen Z’s planning to buy a home are first-timers, compared to 64% of Millennials, 45% of Gen X’ers, and 24% of Boomers. About half (49%) of prospective buyers in the Northeast are purchasing a home for the first time. The share is highest in the Midwest, where it reaches 59%.

24% of Boomers are First-Time home buyers!

Are you surprised? Since I lived most of my life in the Northeast, I am not. Working in major cities like New York, Boston, or even in Washington, DC, makes it challenging to purchase a home nearby. Access to public transportation or the ability to walk to work can be more important than becoming a homeowner. According to the latest census, most New Yorker City residents rent their apartment, as many as two-thirds. But, as more Boomers approach retirement age and decide to move out of the city, many of them become home buyers for the first time.

Recently, I asked my good friend Nikki Beauchamp, Global Real Estate Advisor, Engel & Völkers, in New York City, for her insight, “NYC is mostly a city of renters,” Nikki shared. “Not only because rents are high and many might be rent-burdened, but it can be hard for people to save enough to buy. Buying in NYC is a unique animal, and while the price is a factor, so is the housing stock, which is not dominated by single-family homes, but by cooperatives, and then condominiums. And, a typical downpayment on a coop is 20 % of the purchase price.”

“Of the 3,142,405 occupied housing units in New York City, a little over two-thirds are rented and just one-third are owned by the people who live in them. New York City includes the five boroughs of Manhattan, Brooklyn, Queens, The Bronx, and Staten Island.”

https://www.valuepenguin.com/new-york-city-renters-statistics

Buying your first home in Delaware

The State of Delaware has a special tax credit for first-time homebuyers that can help make home buying more affordable at any age. Residents can claim part of the annual interest paid on their mortgage (35% of the interest) as a special federal tax credit of up to $2,000 a year. The tax credit can be used along with down payment and closing cost assistance programs through participating lenders.

Eligibility Requirements
To qualify for this tax credit, individuals must purchase a home within the State of Delaware. They must be first-time homebuyers, and the program mandates that the household income and the purchase price not exceed the maximum limits (shown below). Retirement income may fall within these income limits.

Income Limits
New Castle County Non-Targeted areas
1 or 2-person household: $90,100
3 or more person household: $103,615

Kent and Sussex Counties Non-Targeted Areas
1 or 2-person household: $78,900
3 or more person household: $90,735

Transfer Tax exemption

Delaware’s transfer tax is currently 4% of the sales price, with the State portion at 2.5% and the county portion at 1.5%.  The transfer tax is commonly split evenly between the buyer and the seller, so the buyer pays 2%, and the seller pays 2%.  First time home buyers have been exempt from the county portion of 0.75% as long as the property is not located inside a municipality such as the town of Middletown.  Delaware first-time homebuyers are now exempt from 0.5% of the state portion of up to $400,000, so the total exemption is 1.25% of the 2% paid by the home buyer.  So, essentially a first-time homebuyer could pay only 0.75%, which can save thousands of dollars.

Note: All information mentioned above was accurate at the time of publication and may no longer be current – visit the program website for updated information.

The team at Active Adults Realty keeps a watchful eye on what’s happening in Delaware real estate. Whether you are a first time Boomer home buyer or you’ve owned many homes over your lifetime, don’t hesitate to reach out to us with your questions. We’re here to help you find a great home in a desirable neighborhood that suits your needs. Schedule an appointment soon. If you’re relocating to Delaware, download our complimentary Relocation Guide.