Are First Time Home Buyers disappearing from the market?
The answer to Greg's question is YES. But it doesnt have to be. So if you are in the market to buy a house especially now #interestrates is still at a historically low rate at 4.5%,then you definitely want to buy a house now. And if you are home owner especially in Washington DC,you definitely want to consider selling your house now and take advantage of this great Real Estate Market.
Without question, housing recovery was the result of affordability. Bargain basement home prices and historically low interest rates, allowed millions of first time home buyers to become homeowners.
Now many experts fear that first time home buyers will disappear from the market.
It was fun while it lasted, but most first time homebuyers are not yet priced out of the market.While prices and rates are no longer at “historic” levels, homes are still a great value and homeownership is not beyond your reach.
Related: Scary times for first time home buyers?
First time home buyers are loan dependent. Because of limited income and resources, your loan approval can change based on interest rate movement and loan guideline changes.
Here are a couple of factors that have/will impact your ability to qualify for your home loan.
On Friday the mortgage markets had another historical move reaching a multi-year high when it comes to the 30-year fixed rate mortgage rate.
QRM (qualified residential mortgage) guidelines will be out later this year and while there are a number of provisions, the one that could have the most “chilling effect” on your loan approval is limiting the maximum debt-to-income ratio to 43%
Looking at the graph, you can see what the impact interest rates have on your ability to qualify. Based on someone being able to purchase with a $2,000 payment, $450,000 was doable at 3.4 percent (just in May) versus $375,000 to $380,000 this month. In other words $70,000 to $75,000 would need to be shaved off in price to keep the affordability in the same playing field. (Payment estimates are P&I only and are for demonstration purposes only).
No one knows what will happen to home prices and interest rates going forward. If you’ve decided that owning a home is the right decision for you and your family you’ll be gambling with your money if you decide to wait for “things to get better”.
Related: 4 Steps to a Quicker Move in
We have helped countless first time home buyers make the right home buying decision. They all have one thing in common they contacted us.
Contact a First Time Home Buyer Specialist
Greg Cook
First Time Home Buyer Specialist
FirstTimeHomeBuyersNetwork.com
951-265-4532
greg@firsttimehomebuyersnetwork.com
http://firsttimehomebuyersnetwork.com
NMLS ID #283159
CA RE Broker #01116365
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