The thrill of owning a home seems to have resurrected itself after years of home buyers regretting their choice of buying a home or out-right rejecting the thought of even considering purchasing a property. Prospective home buyers now feel confident that buying a house will not lead to a financial catastrophe and have a sense over the long haul that homeownership is again, the American Dream. Buyers are more optimistic than in the recent past and many factors have changed the dynamics of buying a home now compared to the last few years.
Interest Rates: Mortgage interest rates have steadily crept to record lows over the last few months and now stand at 3.87%, the ninth time over the last year that rates fell to record lows. Interest rates in February of 2011 stood at 5.02%. Buyers are taking advantage of these opportunities with a renewed fervor. Ben Bernanke repeated the Federal Reserve’s plan to hold interest rates near record lows until at least late 2014.
Housing Inventory: The normal supply of homes have historically been low the first couple of months of a new year and this year is no different. Presently the supply and demand factor favors the seller, with demand outweighing supply at this time. The majority of homes come on the market in the Spring and Summer. More correctly priced homes are garnishing multiple offers with the low surplus of available inventory being the logical reason. Open houses are now gushing with serious prospects that would like too or will be buying a home this year.
Low Down Payment: The assumption that buyers need 20% down payments are inaccurate. The FHA loan has been around since 1934 and a down payment can be as low as 3.5% of the purchase price and most of your closing cost and fees can be included in the loan. For those fixer-uppers, FHA has a loan that allows you to buy a home, fix it up and include all the cost in one loan. In a few cases, investors can qualify for a FHA loan. Lenders still require a 20% to 25% down payment for investors using conventional terms.
Home Prices: Housing prices have tumbled nationally and locally. Since 2006, homes in Davis, California have adjusted by 20% and our surrounding neighbors have plummeted by 50% or more. Over the last three years, Davis has stabilized with less than a 2% price difference. We now have the triple threat or the perfect storm for home buyers, historical low-interest rates, low down payment requirements and the huge price drop. Add in the fact that some sellers are offering buyer incentives such as assistance with closing cost or credits for home improvements. Please visit my website at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my informative blogs and easy access to view local area homes in Davis, California and the surrounding communities.