If you are one of the millions affected by the yearly increases in rent, 2015 just might be the year for you to make the jump to owning your own home. The home buying conditions are changing for the better, and that means this year is the perfect opportunity for you to reach your goal of leaving those rent payments behind for good. There are four major trends in the housing market that make now a great time to consider buying rather than renting.
New Guidelines for Lending
If high down payments have kept you from being able to consider purchasing a home in the past, Fannie Mae and Freddie Mac’s return to a 3% down payment may be the answer. This decrease in new homebuyer down payments can have a major impact on the upfront costs of buying a home, allowing you to make the move, even if you don’t have a significant amount of extra cash lying around.
While the 3% down payment makes owning much more achievable, you will need to meet other qualification requirements:
- A minimum credit score of 620
- Documented income, employment status, and assets
- Purchasing private mortgage insurance
- Home ownership counseling
Even with these requirements, new home sales are still expected to increase by around 13% in 2015, and these programs may be just what you need to reach your goals.
Home builders are also taking advantage of the potential increase in new home buyers, and this means you will have many more homes from which to choose. What makes this even better is that there are builders who are building entry level homes that are around half the cost of their usual constructions, with a focus on homes in the $120,000 to $150,000 range.
It is also believed that the increase in first time buyers will also lead to current homeowners making the decision to move to more expensive homes themselves. As a result, there will likely be an increase in the number of available homes in lower price ranges, giving you even more choices for finding your perfect new home.
Lower Home Prices
The number of new homes that are expected to hit the market also means that the supply will increase. Experts believe that this increase will have a positive effect on the prices of homes for sale, making them even more affordable. It is also believed that this affordability will also reach some of the metro markets, which is a major consideration for those who work in those areas.
While these experts believe that lower prices are on the horizon, there is also discussion on the potential for major investors lowering the number of properties that they are purchasing. If this is the case, it could also lead to more affordability, as they won’t be increasing the prices based on those additional purchases.
Mortgage Rate Increases Will Be Minimal
While it is expected for mortgage rates to increase 2015, it is not believed that it will happen until summer or even later in the year. Additionally, experts believe that it will either top out at around 4.5%, with the highest estimates being only 5%. When compared with historic interest rates, the predicted percentages are still quite good.
These four market conditions all make 2015 a promising year for renters and those who have put off purchasing their own homes. If you are ready to take advantage of this opportunity, contact us today – you just might find that owning your own home is not only doable, but even more affordable than you think.