If you ask a real estate agent when the best time to buy a home is, chances are the answer will always be “now.” As housing prices and mortgage rates start to tick up, the real estate agent’s advice may be right on target.
How Much Is a $200,000 Mortgage?
Housing Market Has Mostly Recovered
It’s not just mortgage rates that are on the rise. Housing prices are also rising in most markets across the country. As prices rise, the Federal Housing Finance Agency recently increased the maximum conforming loan amount for mortgages that meet Fannie Mae and Freddie Mac guidelines in most areas of the country to $453,100, an increase from $424,100 in 2017.
These loans, known as conforming mortgages, are considered less risky by banks, allowing them to offer a lower interest rate. Raising the conforming loan limit means more borrowers will be able to purchase a home without having to get a nonconforming—or jumbo—mortgage, which typically carries a higher interest rate.
*Some info from Consumer Reports
First-time starter home buyers
First timer buyers are predicted to increase 4% through 2018 going into 2019. Nevertheless, of certain notice to your first-time buyers might be this bit of information, home construction will also grow over 7% during this time frame.
How does this effect what’s currently on the market? Majority of first time home buyers are young, and in the market for smaller homes or condos. The major inventory of homes for the last several years has been dominated by higher-priced homes, and the fact of the matter is, it’s not always a match to satisfy market trends and needs. The new construction boom of condos and starter homes will address the balance in demand.
High Home Prices
Information gathered from S&P Corelogic and the Federal Housing Finance Administration (FHFA) states home price growth rate in major metropolitan areas have risen 6.2% across the nation. This is a terrific for homeowners, building faster value, equity build up, and terrific piggy bank position on real estate ownership. Home buyers, will have to spend more as the market grows, but according to realtor.com, we are on pace at a slower growth rate of 3%. This should hold and keep affordability.