How the Residential Housing Market Is Helping Buyers
There's no doubt that it has been difficult for many prospective homeowners to get their foot in the door. After all, we're currently in a seller's market. This means that sellers have more leverage when it comes to negotiation due to higher house prices and increased demand.
In a report by Zillow, most experts surveyed predicted that by 2019, the housing market will shift back to a buyer's market. However, you don't need to wait until 2019 to take advantage of these changing tides.
Here's what you need to know about the residential housing market:
What Goes Up...Must Come Down
Last year, prices rose almost every month, increasing 5.61% nationally. While some experts believe prices will continue to climb, most agree that those gains will slow down.
The fact is, home prices can't rise faster than inflation and incomes indefinitely, and some sellers will be seeing the writing on the wall. This means you may be able to buy your first home for a much more reasonable price than you were anticipating.
More Homes Are Being Built
As supply increases, prices typically decrease. We're finally seeing an increase in housing supply as more new homes are being built. Late last year, homebuilder sentiment began increasing.
More Financing Opportunities
While rates are still increasing, credit is becoming easier to attain. The Federal Housing Finance Agency increased lending limits this year, which is the first time conforming loan limits have changed since 2006.
These increases reflect a rising confidence in the ability for consumers to repay larger loans. They provide buyers with more options when they begin to choose their first home.
Lenders are also offering a few new mortgage programs that only require a modest down payment. These options don't require the buyer to purchase an FHA loan and allow them to only need a credit score of around 620 or 650.
Growing Affordability
While there's no doubt that house prices have been on the rise for some time, more than 60% are still considered affordable for the average buyer. Affordable homes are those where the debt-to-income ratio is less than 28% of the median household monthly income for the area.
With affordability remaining healthy, it's a great chance for first-time homebuyers to begin considering their options. Try getting pre-approval for your mortgage before rates rise any higher.
As you can see, there are many ways that you can benefit from the residential housing market if you're considering buying a property. Get in touch today to learn how we can help make your home ownership dreams come true.