Take Advantage of the Mortgage Application Dip
- First-time home buyers were 49% of the market in April, about 9% higher than normal. First-timers’ ratios should return to more normal levels post-tax credit.
- With a large amount of unsold inventory, including homes in some stage of foreclosure or in the “shadows,” housing supplies are still at buyer’s market levels with approximately 8.4- months on hand, according to the April 2010 sales report from the National Association of REALTORS®.
- Mortgage applications are at a 13-year low in June, as the tide of incentified buyers dissipates. This eliminates significant competition from other buyers for homes on the market.
- In some cases, the frenzy of multiple offers on affordable homes is cooling into a more stable, sensible and negotiable market for buyers.
- Homeowners sitting on unsold properties may be more willing to negotiate price.
- With one-third of homes sold as distressed properties, banks are more willing to sell “short,” or allow homes on which they hold mortgages to be sold for less than the mortgagee owes on their bank note.
- Home prices, while up over 4% from a year ago, still have far to go to retest peak sales prices from mid-August 2006. The window for bargains may be closing.
- The Federal Reserve says the economy is improving, albeit sluggishly.
- The job market is slowly improving. More jobs were added in May 2010, and unemployment claims dropped to 9.7% from 9.9%.
- Affordability is rising off historical highs set in January 2010. In 2007, household income required to afford the median priced home at $217,900 was 21.7% of income. Today, the median price is $173,400, requiring only 14.9% of household income, according to NAR’s housing affordability index.
- For over a month, mortgage interest rates have hovered near record lows. By mid-June 2010, fixed rates reached 4.81% on a benchmark 30-year conventional loan.
If you’re in the market to buy a home and are waiting to see what happens, you’re already in the best position you’re likely to ever be in - buying conditions are currently ideal for purchasing a home.
Blanche Evans is CEO of Evans Emedia, Inc. and publisher of The Evans Ezine. As an award-winning journalist, Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and twice recognized as one of the industry's most "Notables."
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