According to a recent article by Ann Carens in the New York Times, homebuyers are seeing signs of relief in the market. Home price appreciation is slowing to 3.6%, a much less robust rate of +5% last year according to the National Association of REALTORS®. The median home price is $267,000, also according to NAR. Inventory is up nationwide and mortgage rates are low.
Ralph McLaughlin, deputy chief economist with CoreLogic, said, “Homebuyers are probably going to feel the first signs of relief…” in years.
Last year’s housing market was a “frenzy,” according to NAR’s chief economist Lawrence Yun. This year, however, the market has been tilting toward buyers especially at the top end of the market where the 2017 Tax Law has affected homes priced over $750,000. Homes priced at $200,000 and below remain pretty much unchanged from last year because, according to Danielle Hale, chief economist with realtor.com, inventory remains more than tight.
In this same virtual discussion with Carens, NAR’s Yun added that more older people are staying in their homes longer, another squeeze in entry level housing options due to lack of inventory ($212,000 according to regional vice president Chip Murphy with Hunt Real Estate) and demand is high, lack of inventory results in multiple offers and bidding wars.
Carens article in the NY Times posed several questions and answers regarding real estate. A few of those Q and A’s were
- How much is required for a down payment these days?
- According to Genworth Mortgage Insurance, 80% of first-time buyers used some form of mortgage requiring just 3% for a down payment.
- Can gifts from family be used as down payments?
- “Yes,” according to Fannie Mae. Nearly 25% of Fannie’s clients use gifts to finance their home loans.
- Those gifts must be documented as such in a formal letter stating that the money is a gift, not a loan.
- What is the current mortgage interest rate?
- On a 30-year fixed mortgage, rates fell to 3.99%. This is the first time rates have hit below 4% since January 2018.
- The upshot on these low interest rates? They ought to give the housing market a needed boost, according to the chief economist with Fannie Mae.