Cooling Prices Make Buying a Home a Hot Idea
A tight real estate market in 2014 kept many prospective homeowners out in the cold, but options for buying a home are heating up this year. A new Fox Business article gives credit to increased inventory for this upturn, as well as other positive reasons more people will be entering the market.
Mortgages won’t be reserved for the few and far between.
“Lenders will accommodate people who had some issues but whose credit has been good since,” says Brian Simon, Chief Strategy Officer at New Penn Financial. Lending guidelines won’t revert back to the “no questions asked” scenarios seen in the early 2000’s, but more people will be able to qualify in 2015. Freddie Mac and Fannie Mae are changing what buying a home could look like for first-time buyers this year. If your credit is good, you may qualify for a fixed-rate mortgage with 3% down instead of 5%. There are stipulations to this program as well as other programs offered state-by-state, but this will definitely allow for more of this type of buyer to enter the market.
Interest rates are predicted to be a non-prediction.
Interest rates won’t be an issue for buying a home this year. Many analysts are predicting that these rates will remain steady and stay low. If they rise over the course of 2015, it’s not expected to be by much. Realtor.com estimates that they will rise, but end this year at nothing higher than a 5% rate for a thirty-year fixed mortgage.
A larger inventory of homes will be available.
Lack of inventory made buying a home difficult for some in 2014. Bidding wars over properties happened frequently, and if you were not a cash buyer who had the ability to move fast you often missed out. Not so this year, says article author Donna Fuscaldo, increased inventory will give more people the chance at purchasing. Nela Richardson, chief economist for real estate brokerage Redfin, expects buying a home should be easier in the $375,000 range with bidding wars becoming somewhat unusual. She predicts that only a third of the market will experience these type of situations, down from 75% in 2013.
Home buyers will also look slightly different in 2015. No longer will the market be marked so heavily with investors. Bankruptcies are at a seven year low and those who were on the losing end of the housing bubble bursting are re-establishing their credit and re-entering the market alongside many first-time home buyers.
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