Friday, December 19, 2014
By Admin

It's such a big part of the American Dream! Owning a home is a key goal in almost every American's life. The great news is that, all things remaining equal, 2015 looks like being a fantastic year to finally take the plunge and buy a place of your own.

As we reported in Tuesday's blog, the housing market is heading out of 2014 on the back of some very impressive statistics that demonstrate a healthy growth in sales this fall.

No question about it, real estate has faced tough challenges this year. Reduced Government support for the housing market and a tightening of lending standards at the beginning of 2014 seemed to be ushering in higher mortgage rates. In practice, the exact opposite has happened, however, and as recently as yesterday there were widespread reports of 30 year mortgage rates reaching an 18 month low!

Reduced rates have strongly influenced the market this year, with the very busiest periods closely matching those times when rates were in a downward spiral. There can, of course, but no guarantee how long such low percentages will sustain, so there is a strong argument to find the home you want now, get pre-approved for your home loan and lock in the rate.

Would that it were all so simple, of course. Ever since the housing market started rebounding from the recession years, first time buyers have struggled to gain a significant foothold in the market. Government has been very aware of this problem and a Federal Reserve survey last summer demonstrated that 45% of current renters were delaying home purchase due to the struggle to save for a sizeable down payment.

In light of this and recognizing the importance of creating a healthy buyer chain starting with the first time purchaser, Fannie Mae, the leading source of liquidity for housing in America, last week started to back down payments of as little as 3% of the price of a home (Freddie Mac will also be introducing a similar low down payment scheme called Home Possible Advantage in March).

In a year of big headlines, the launch of massively reduced down payment requirements for qualifying buyers is arguably the best news of all for a wide range of potential purchasers, but most importantly those seeking to get an initial foot on the home ownership ladder. At a stroke, this innovation has vast potential to further stimulate demand for homes and make 2015 a year to remember.

Even if, or should we say when, mortgage rates begin to rise again, widely available low down payment home loans are still going to create incredibly positive buyer sentiment, especially among first timers, because they represent a huge reduction in the entry level upfront cost of buying a home. Suddenly, what seemed like an impossible dream is now becoming a distinct possibility for many more people.

All this good news comes at a time when inventory of homes available for sale in the Albuquerque area is rising, offering better choice at any given price point. Increased competition among sellers also keeps price inflation under control.

We are incredibly excited about the prospects for 2015, not least because we have developed a great deal of expertise and experience in the first time buyer sector. Why not contact us today and let us help you explore your best options for the year ahead.