Low rates and home inventory
Are you thinking about buying or selling? Today’s mortgage rates are still low and now may be the best time to consider a change. However, if you are a buyer, you may see less homes for sale and face more competition. Inventory is likely the biggest factor impacting the market this season.
Current homeowners who are locked into an entry-level home with a long-term low rate are less likely to consider a move. However, according to Realtor.com, there are actually some markets where home sales have been on the rise:
- Detroit metro area saw a 5.7 percent increase from February 2014 to February 2015
- Pittsburgh saw a 3.9 percent jump over the same period
- Jacksonville went up 3.3 percent
- Indianapolis increased 1.9 percent
Although mortgage rates are currently low, they are predicted to rise throughout the year. According to the Mortgage Bankers Association, the 30-year fixed-rate is projected to increase slightly up to 4 percent in the second quarter of 2015.
What about home sales?
Even with a potential rate increase, home sales and prices may also see a jump. Previously owned homes as well as new home sales should rise. The Mortgage Bankers Association is forecasting a 13 percent increase in sales for 2015. If you’re looking to purchase a vacation property or a high-end home, be on the lookout for an even greater increase in the available options. Sales of luxury homes are expected to increase substantially with the help of baby boomers and international buyers.
One of the biggest factors keeping first-time home-buyers out of the market is the fear of denial due to a less-than-perfect credit score. But, there is good news! Banks are expected to increase the availability of credit throughout the season. To note, the FHA, or Federal Housing Administration, has reduced the annual mortgage insurance required from borrowers. Borrowers who take out FHA loans and make down payments of less than 5 percent will be charged .85 percent of the loan amount every year for mortgage insurance.
If you’re needing additional mortgage advice, contact a PrimeLending loan officer in your area today.