Tag - current mortgage rates

Now is the Time to Buy

The housing market will remain hot this year as favorable interest rates and sky-high demand continue to drive the market forward. Although we are seeing a small rise in rates they are still near all-time lows. The main worry for today’s market is the low inventory of houses on the market. Sure, you can sell your home no problem, but what are you going to move into? Supply is extremely tight and inventory levels are dramatically below anything we have seen in the past. New construction is not keeping up with demand, and the pandemic shutdowns took a huge chunk out of builders’ production, as they were not able to put anything on the market for six months. However, thanks to low interest rates, they were selling more than they ever sold before. The market was already struggling with inventory but due to this decrease in builders’ supply inventory got even tighter. Plus let’s not forget, with low inventory comes higher home prices since more buyers are competing for the same homes which drives up a seller’s price. A recent report showed home prices grew by about 10% in 2020 and show no signs of letting up in 2021. We won’t begin to see price decrease unless there is an is an excess inventory. The good news for the housing market is we are definitely not over built. Builders are more in demand than ever and are working quickly to build new inventory for the market. As new inventory comes onto the market and more people decide to sell their homes, buyers looking to buy this spring could be entering into the market at an amazing time. Fitting perfectly into a sweet spot where there is more inventory and fewer buyers, since a handful of buyers will be bowing out to wait to for the market to slow down. But the thing with real estate is you don’t want to wait. You could be missing out on major appreciation gain. Currently high demand and tight supply are pointing towards 6% appreciation for homes in 2021. For instance, if you buy a home for $600,000 with 10% or $60,000 down, a 6% appreciation on that home equals a 60% return on that down payment investment. You can’t expect an appreciation gain like that if you try to wait for the market to slow down. If you're shopping for a home, with rates near historic lows and home prices appreciating nationwide, there is an amazing opportunity to build wealth for your family through real estate. Contact me today and let’s discuss your situation.

Biden’s Proposed Tax Credit Could Drive up Home Prices

President Elect Joe Biden has proposed a $15,000 tax credit to help first-time homebuyers purchase a property. The proposed First Down Payment Tax Credit is meant to help families offset the costs of homebuying. Buyers will receive the tax credit when they make the purchase instead of waiting to receive the assistance when they file taxes the following year. The National Association of Realtors Chief Economist Lawrence Yun responded to the proposed tax plan by saying that the $15,000 tax credit is good news since it can go a long way in terms of helping first-time homebuyers and minority households. However, this is only one part of the solution. Although this plan seems like a good path to take to increase homeownership in America, there are also dangers to the tax credit. “The full story is that stimulating the demand just by itself is insufficient,” Yun said. “The $15,000 will certainly help the possibility for the potential first-time buyers, but the only way to make that impactful is to ensure that we have sufficient supply available as we go into 2021.” Yun fears that Biden’s proposed tax credit will add more fuel to the housing demand without addressing the lack of supply. Which could result in home prices accelerating much higher; partly negating some of the benefits of the $15,000 tax credit. Currently we are experiencing a historic home shortage and record-low mortgage rates are pushing prices to new heights. The housing supply shortage continues to get tighter as not enough homes are being built to face the demand from buyers. “If we add further stimulus to the demand without addressing the supply… it will simply bump up the prices even higher.” As we move forward into the new year it is important to be cautious that this tax credit could drive home prices higher. If you are wanting to get ahead of this tax plan now is the time to act. Contact us today to discuss your options for a home purchase.

Weekly Update on Mortgage Rates and 3 Things You Need to Understand

mortgage ratesAlthough mortgage rates started out yesterday (Feb 19) a bit lower than they did the day before, this didn't last for long.  In fact, by yesterday at mid-morning, bond markets were already losing ground.  Because of this, lenders began issuing negative reprices.  All in all, this week's mortgage rates are causing home buyers to look at higher closing costs if they don't lock in over the next couple of days.  The best borrowing rate as of right now is generally being issued at 4.375%, and this is for a 30-year fixed loan.  There has been no detectable drama in this week's mortgage rates.  Because of this, there is no clear indicator as to how the future market for mortgage rates is going to go.   We've only seen two major moves in 2014, with the big move towards lower rates occurring in January, and then back up to higher rates last week.  Because there has been no major move this week, some market specialists are predicting there to be no major move for the next few weeks.  In fact, some experts are predicting no move will take place until the harsh winter weather conditions get behind us.  

Top 3 Things to Understand about Mortgage Rates

How to secure the best mortgage rate: The best mortgage rate comes at a time in which mortgage rates are low and you have a good credit score.  Most times, when mortgage rates are historically low, you will do best to secure a fixed rate mortgage loan because this will guarantee the low rate for the life of the loan. How mortgage rates affect the housing market: When mortgage rates are high, people tend to steer clear of buying homes.  When they are low, people of course flock to their nearest mortgage lender and apply like crazy for a loan.  Because mortgage rates tend to fluctuate on a daily basis, this means the housing market is affected from one day to the next as to whether or not people are interested in buying a home; however, when it is predicted that mortgage rates will stay somewhat low for an extended period of time, this is when the housing market booms. Things that affect mortgage rates: There are three main factors that affect mortgage rates: Type of loan, the Federal Reserve and your credit score.  Each factor plays its own part in the type of rates that you will qualify for; however, the two most influential are your credit score and the Federal Reserve.   If you would like more information on current mortgage rates, or info on securing a mortgage loan, please don't hesitate to contact Anthony VanDyke at ALV Mortgage today.