House hunters are often warned not to chase deals – the perfect house might slip through their fingers because they don’t like the paint color. It’s a good idea to stay focused on your long-term happiness and not small details, or even a slightly lower price.
But that doesn’t mean you shouldn’t approach the house-hunting project without analyzing the market and being proactive. Here are five trends for the summer that can have a huge impact on your house buying experience.
Prices are Diving
The Spring house buying ‛season’ wasn’t as strong as many expected. The net result is house prices are likely going to be discounted over the summer, at least at first. Look for bargains!
FHA Loans are Cheaper
FHA loans are the only option for people with small down-payments. But FHA loans require insurance and an up-front fee of 1.75% of the loan. The FHA’s new HAWK program can reduce that fee to 1.25%, so FHA buyers are urged to look into it.
Mortgages Remain Cheap
We keep expecting interest rates to rise, but so far they remain kind of flat. While we expect average rates to hit 5% by the end of the year, there are still plenty of bargain rates out there.
Standards are Falling
After the debacle of 2008 and the subsequent economic meltdown, banks got very careful about loans. Standards are loosening up a little as the economy settles – not to 2008 levels, but it’s probably easier to get a mortgage this summer than it has been in years.
Mortgages are Getting Creative Again
The government cracked down on ‛creative’ mortgages, and changed rules to deter banks from being too creative. Banks are getting more comfortable, though, and are taking some (small) chances again. People who couldn’t get a mortgage six months ago now have a shot.