As the economy has improved coming out of the Great Recession, home sales have picked up too. In mid-2014, sales of existing homes were on pace to top 5 million and expected to top 5.2 million in 2015, according to a forecast from the National Association of Realtors®.
New construction was forecasted to hit one million homes in 2014 and reach 1.3 million homes in 2015. This is still below the underlying demand of about 1.5 million, but should gradually normalize. New-home sales are likely to increase to 620,000 in 2015, according to Lawrence Yun, chief economist of the National Association of Realtors (NAR) ¹.
Some industry experts believe that new single family housing construction is still lagging, but some markets have experienced significant growth in construction financing due to programs that offer low down payments, flexible rates and terms, and simple closing options.
Many young adults—some of whom have lived with their parents to save money—may be ready for a home of their own. However, many of them mistakenly believe they don’t have enough saved for a down payment. In 2014, one in five homebuyers put down less than 10% on a conventional mortgage.*
Homebuyers can be pessimistic about their chances to qualify for a mortgage. When discussing access to credit, Mel Watt, Director of the Federal Housing Finance Agency (FHFA) ¹ said, “There are creditworthy borrowers who have enough income to afford monthly mortgage payments but don’t have a large down payment and have the ability to pay for closing costs upfront.” Down payment size is not the best indicator of whether a borrower has the ability to repay. Fannie Mae and Freddie Mac will also evaluate the full financial picture of a borrower, including credit histories and other factors when financing a home.
Yun said "existing-home sales in 2014 got off to a slow start, but have recently shown stronger growth behind improvements in inventory, slower price gains, and pent-up demand." He also believes, "the improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners, providing them the ability to sell after waiting the last few years."
With a good supply of homes for sale, mortgage rates are still historically low. There are also a variety of mortgage options available to fit your individual needs and budget.
What You Can Do Now To Prepare
Get a preapproval
Work with a reputable Real Estate Agent or builder
Don’t assume you can’t buy or build a home!
The mortgage lenders at Athens Federal can help you
find a mortgage that fits your individual needs.
To learn more or apply now, visit www.athensfederal.com/mortgagecenter