Although home price increases nowadays are leveling off, the unbelievable surge in the recent past has left many homeowner candidates out of the picture. Valley incomes have a way to go before catching up to that real estate escalation. With the median household income less than $50,000 and employing the NAR Housing Affordability Index, southern Nevadafares rather poorly using this criteria, according to Keith Schwer from UNLV's Center for Business and Economic Research.
It appears that resale houses are offered at a lower cost when compared with new homes, but upon looking at the price difference closer, builder incentives, which often are attractive indeed, narrow the gap considerably. In many cases to a level where there is no difference at all. So what are you to do? It's an issue between a mature neighborhood closer to town with wide streets or a new area away in the suburbs and the pros and cons associated with each. What are your preferences?
That's about the price of a home. Financing is equally important. ARMs and interest-only programs feature lower monthly payments than 30-year fixed mortgages, but there are disadvantages to take into account. ARMs usually adjust upward after a period and interest-only loans do not reduce the principal balance. A 40-year mortgage also has a lower payment, but the other side is that the interest rate is higher and equity build-up is slower. A mortgage really is a planning instrument and should be integrated into your overall financial objectives. It is prudent to carefully weigh which program fits your situation the best.
The subprime market lenders that in the past helped many purchase a home are experiencing powerful turbulence right now and their underwriting guidelines are tightening as we speak to stop the bleeding. This is bound to cause additional difficulties for the market segment.
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