What can home buyers expect to face this selling season? An improving housing market has made it a different picture in many areas compared to recent years, housing experts say. A recent article at Bankrate.com notes some of the following trends taking shape in the housing market this spring:
Summer – and therefore the selling/buying season – is upon us and with the housing market already showing signs of improvements, we just might see something this season that we haven’t in a while: activity.
According to Bankrate.com, here are the trends to look out for as the warm weather grows warmer:
- Fierce competition. With falling home values and mortgage rates at record lows, housing affordability is at record highs, and more buyers jumping off the fence of indecision. Mixed with low if not sinking inventories of homes for sale, and you’ve got competition.
These are the kind of circumstances that investors love, and they are grabbing real estate at bargain prices, often in all-cash deals, which means greater competition for traditional home buyers too, Bankrate.com reports. In turn, investors are renting out the properties at high rates.
- More renters show desire to become home owners. Recent surveys show that buying a home is now more affordable than renting, which will entice more renters to enter the market. Bankrate.com, quoting a study by Kingsley Associates, says about 59.5 percent of tenants recently surveyed say they intend to renew their leases this year.
- More-expensive mortgages. Fannie Mae, Freddie Mac, and the Federal Housing Administration recently have raised their loan fees, which means home buyers will pay a little more for their mortgages this spring, affecting those who credit scores aren’t in the high 600s to low 700s, Bankrate.com reports.
Buyers with smaller down payments also can expect to pay more for FHA mortgage insurance premiums, which have risen to 1.75 percent of the loan total. According to Bankrate.com, a borrower who takes out a $200,000 FHA loan will likely have to pay about $3,500 for mortgage insurance upfront. Prior to the increase taking effect, borrowers would pay about $2,000 for that same loan amount.
Borrowers with higher mortgages can expect higher fees, as well, with the FHA increasing its annual insurance for mortgages more than $625,500 in June.