As the housing market intensifies and house prices skyrocket, there are concerns that the market is entering a housing bubble. But mortgage experts say there is nothing to fear.
“Despite what you may have heard, we are not in a housing bubble,” mortgage billionaire and United Wholesale Mortgage chief executive Mat Ishbia said in his speech. monthly video message. “The housing crash of ’08 was the result of a flawed foundation on which the mortgage industry was built. The CFPB made significant reforms to the sector in the following years to prevent a similar collapse from happening again. still a good time to buy and more inventory will open this year in Q4 and Q1 2022.”
Whether or not you are buying a home for the first time and are interested in what kind of mortgage you could get, visit Credible to compare rates and mortgage lenders.
Market conditions discourage home buyers
The last home buyer survey report of Point2Homes showed that only 21% of home hunters plan to buy a home in the next six months, significantly less than 34% at the start of the pandemic and 53% at the start of 2019.
That’s because market conditions, such as low supply and rising home prices, discourage many potential home buyers and indicate a seller’s market.
About 51% of potential home buyers said they had no particular concerns about going through the buying process and were more concerned about having enough properties to choose from.
About 45% of those surveyed worried that they wouldn’t be able to keep up with rising house prices. The latest CoreLogic Home Price Index report showed: house prices increased 13% per year, the third consecutive month in double digits.
Overall, in May, the net share of consumers saying it’s a good time to buy fell 20 percentage points, the largest single-month drop in survey history, and hit a new survey low of -21%, according to the latest monthly Fannie Mae Home Price Sentiment Index.
“The ‘good time to buy’ component continued to fall and hit another low in the survey as consumers seem well aware of higher house prices and low home supply, the two reasons most often cited for that particular sentiment. said Doug Duncan, Fannie Mae’s senior vice president and chief economist. “However, despite the challenging buying conditions, consumers seem more likely to buy on their next move, a preference that may be supported by expectations of continued low mortgage rates, as well as the high savings rate during the pandemic, which may have led many to pay down a down payment. could afford.”
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Current low interest rates make now a good time to buy
Despite rising house prices and fierce competition in the real estate landscape, today’s low interest rates make taking out a mortgage more feasible and now is a great time to buy a home.
“We don’t think house prices will go up and then crash — that’s not realistic because in ’07, ’08, ’09 when that happened, it was all based on a cracked foundation in the mortgage industry,” Ishbia said. He explained that “people are getting loans now, they can pay them off, and it’s a good, solid thing across the board.”
Home prices aren’t about to collapse and interest rates remain historically low for home buyers. It may be in your best interest to look for the loan you are interested in, such as a USDA loan, VA loans, or FHA loans.
“Now is a good time to buy,” Ishbia said. “On an affordability index that understands how rates and home prices come together, it probably won’t get any better.”
If you have saved money and are ready to buy a house, view credible to compare the interest rates of different mortgage lenders. using one online mortgage calculator can also help you estimate monthly mortgage payments and narrow home prices within your reach.
More homes are coming on the market
Later this year, experts expect there will be more inventory in the housing market, hopefully making buying a home a little easier. With tolerance programs, home sales have slowed. When those grace periods end, much more inventory could hit the market in the fourth quarter of this year and the first quarter of 2022.
“It’s a short-term problem that will be cleared up soon, but now is still a good time to buy,” said Ishbia.
If you have questions about a mortgage or buying a home – whether you’re buying a home for the first time or have gone through the process before – you can contact Credible to speak to a mortgage expert and get the personal financial answers you need.
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