“Buying a home is one of the biggest financial decisions you will make, and you’ll likely need to do a lot of planning and research before you take the leap. But don’t get snagged by misconceptions. Mortgage expert Tim Manni busts these six common real estate myths to help you find — and afford — your first home.”
Redfin Chief Economist says to win in a hot market, home buyers should take advantage of technology to find homes as soon as they are listed.
Making sense of the story:
Arm yourself with tech tools to find available homes quickly. With the variety of apps available today, you can receive listing alerts so that you’re notified as soon as a home in your price range or search area hits the market.
Buyers will gain an advantage from whatever concessions they can offer. Instead of a small earnest-money deposit, we’ve seen buyers put into escrow their entire down payment or even half of the purchase price.
You needn’t waive a contingency for inspection in the purchase contract.
Rather, you can agree to pay the seller, say, $2,500, or next month’s mortgage payment, if you walk away.
Work with a local or reputable lender to get a pre¬approval for your mortgage that includes full documentation of your means to obtain a certain amount of financing in advance of a signed purchase contract.
That may give you the confidence to waive a contingency for financing, and it’s almost as good as cash for closing a deal quickly.
Because sellers can sell their homes in days but may take months to buy, you can gain leverage by offering to “rent back” their home to them for a certain number of months.
Fall can be a good time to buy a home because prices generally peak in the summer and ease up in the fall.
There’s a bit less inventory, but many fewer buyers. Plus, sellers who list in the fall are serious because they must leave because of job relocation, divorce or something else that made them miss the top of the season.
As prices rise, mortgage lenders are making it easier to buy a house.
Source: Los Angeles Times
Some prices are rising across the country and mortgage rates, though still historically low, are up since the presidential election.
Simply put, buying a home isn’t easy, especially in high-cost metropolitan areas such as Los Angeles County, where the median price of a home hit $569,000 in June.
But changes in the mortgage industry are afoot, with the goal of loosening some of the strict standards established after the subprime crisis — rules some blame for impeding sales.
“The reality has sunk in that there are buyers out there who will be able to buy homes and make the mortgage payments,” said William E. Brown, the president of the National Assn. of Realtors. The industry is “trying to give them more options to buy a house.”
Government-controlled mortgage giants Fannie Mae and Freddie Mac are paving the way by rolling out new programs to encourage home ownership.
The companies, with their congressional mandate to promote home ownership, don’t originate loans, but purchase mortgages from lenders to keep the market moving. And any changes they make in the underwriting standards for the loans they buy can have a big effect.
Student debts have seemed to affect homeownership rates, according to the Federal Reserve Bank of New York.
About 32% of those in their 20s owned a home in 2007, but that’s fallen drastically to 21% in 2016.
While the poor labor market and memories of the housing bubble certainly played a role, student debt can explain up to 35% of the decline, according to a report from the Federal Reserve Bank of New York released Thursday.
The results suggest that the rise in college costs will result in “weaker spending and wealth accumulation among young consumers in the years to come.”
It’s consistent with surveys that have asked those with student debt if it affected their decision to buy a home. Half of those under the age of 35 surveyed by the National Association of Realtors in 2016 said it had delayed their purchase. And 25% told Pew Research Center that student loans had made it harder to buy a home in 2011.
Falling inventory forces homebuyers to move at fastest pace ever
Source: Housing Wire
Housing inventory fell 8.9 percent from last year in the second quarter of 2017, sending homebuyers scurrying to beat the rising competition.
Housing inventory dropped for nine consecutive quarters, and is currently down a full 20 percent from inventory levels five years ago, a new report from Trulia shows.
And now, homebuyers are snatching up homes at the fastest pace since Trulia began tracking in 2012. While 57 percent of homes were still on the market after two months in 2012, today that number shrank down to 47 percent.
Competition is so fierce, in fact, that 33 percent of Americans who bought a home in the last year made an offer without even seeing the home in person, according to a survey from Redfin, an online real estate brokerage.
This is up from 19 percent of buyers who placed an offer on a home without seeing it first last year. Among millennials, even more placed offers without seeing the home in person — a full 41 percent.