Something has been missing from the housing market for a while, first-time home buyers. Although potential Millennial buyers may be tired of renting, the real estate market has been rather discouraging for them. But those obstacles are slowly moving out of the way, opening up the market to younger and first-time buyers.
Easier to get a loan
For years now, without excellent credit and at least 20% for a down payment, getting a mortgage hasn’t been all that easy. However, the rules are loosening, which means it’s a great time for first-time buyers to jump in and apply for a loan. Freddie Mac and Fannie Mae have both changed lending guidelines and made it easier for buyers to get loans, including lowering down payment requirements to 3% in some cases.
Mortgage rates are low
The federal reserve is indicating it will keep short term interest rates at current levels until mid-year. Rates are low and staying low for a while. Residential rates are down to where they were almost two years ago and are 1% lower than they were at this time last year. Rate increases may happen in June depending on how the economy and financial markets are doing. Rates won’t stay this low forever, making this a great time to buy.
Builders are building again. With more new mid-sized houses entering the market, buyers have more inventory to choose from. Listings in 2014 were up from 2013 and are now at the highest levels we’ve seen since 2010.
While conditions are improving for first-time home buyers, the job market is also improving while rent continues to rise. For buyers who have been discouraged and waiting for conditions to improve, these are the conditions they’ve been waiting for.