Written by As the last few years have progressed, we have seen tough times in our economy. The unemployment rate has been dropping, gas prices have been hiked up, and we are seeing consumer confidence at an all time low. Even the real estate market has been hit in a very bad way. Fortunately, with the rates being at an all time low, and the home affordability ratio being very favorable, the market is providing excellent opportunities for people looking to purchase a home. Not only is the market in an ideal position, but lenders, banks, and government entities are providing incentives for buyers to enter into loans that they would have otherwise overlooked.
For instance, some states are offering programs that provide assistance with closing cost, down payments, and the like, up to three percent of the loan amount. Offers such as these can be provided to potential buyers with as little as half of a percent out of the buyers pocket! There are other programs that offer up to 97% financing. Even though there is no monetary assistance, programs such as these allow for loans to be had without the need for appraisals and mortgage insurance (a fee that can add hundreds to your monthly mortgage payment).
With the influx of real estate owned and Fannie May owned properties, banks are trying to decide what must be done in order to move these properties back into the market more efficiently. Not only are incentives being offered to people looking for a new home, but there are also incentives offered to people looking to invest in real estate owned properties. For instance, some banks are offering up to 90% financing for people looking to purchase investment properties. This is great, especially considering the fact that people who have been hit by a short sale or foreclosure are needing to rent while their credit corrects. With home prices at record lows, this current market is in an excellent position for those looking to invest in real estate.
With all of these different incentives and opportunities available for home buyers, along with the first wave of foreclosures and short sellers from a few years ago reaching a point where they can start qualifying for loans again, we are going to begin seeing the demand for homes increasing. I cannot say that now is the time when the market has reached its lowest, but I can say that indicators are pointing to a market recovery over the course of the next few years. Now is the time to buy, simply because we are seeing an excellent combination of home affordability and interest rates. If we wait for the market to drop further, we are risking a potential increase in rates to a point that makes homes less affordable, even if the actual price of a home is to drop further.
