It may be a seller’s market, but according to Yahoo! Homes, it’s still a good – if not the best – time to buy a house.
Below are five major reasons mortgage experts provided Yahoo! Homes as to why there’s no better time than the present to delve into the housing market.
#1: Interest rates are low, but won’t stay that way
The interest rate for a 30-year fixed mortgage is expected to increase to 5 percent by the fourth quarter of this year and 5.3 percent by the end of 2015, according to a recent forecast by the Mortgage Bankers Association (MBA).
The feds are expected to raise rates about six months after they stop buying mortgage bonds, which is projected to happen sometime in 2015, Yahoo! Homes reports. And a quarter of a point of interest equals about $100 more a month on a mortgage.
#2: Credit score requirements are on the way down
For those whose credit score is lower than they care to admit, the good news is that credit score requirements for borrowers looking to take out mortgages are easing.
Yahoo! Homes reports that credit scores on purchase mortgages stood at 755 in March, down from 761 in the previous year, according to data from Ellie Mae, a mortgage-software provider. Credit scores for FHA loans dropped even lower to 684, compared with 696 a year earlier.
The 2014 market is expected to focus more on purchasers, as lenders see an ongoing decline in refinancing, Vickee Adams, vice president of external communications for Wells Fargo Home Lending, tells Yahoo! Homes.
"Having a broader credit score range will serve to attract more borrowers into the market," she explains.
#3: Spring and summer are still the buying time
People who were considering selling their homes didn’t want to during the brutal winter months, and buyers didn’t want to do their searching in the cold and snow, either, Lawrence Yun, chief economist for the National Association of Realtors, tells Yahoo! Homes.
Summer is a popular time to move because children are out of school, but more home owners are also putting their houses up for sale, Yun says.
#4: Buying is more affordable than renting
While buying a house is a significant purchase, it's often less expensive than renting, Yahoo! Homes reports.
According to recent research by Trulia, an online residential real estate site, homeownership compared with renting is still the less expensive way to live in all of the 100 largest metro areas researched. The study compared the costs of renting and owning, assuming homebuyers get a 4.5 percent mortgage rate on a 30-year fixed term loan with 20 percent down.
#5: Home values are still competitive
Home prices have gone up but haven't skyrocketed, so they're still within reach of many buyers, according to Yahoo! Homes. The median existing home price for all housing types in February 2014 was $189,000, which is up 9.1 percent from last February, according to recent press release by the National Association of Realtors (NRA).
And the housing inventory rose 6.4 percent to 2 million existing homes available for sale during the same time period, reports the association, so buyers still have more homes from which to choose depending on where they live.
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RE/MAX of Boulder