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Those seeking their first home or affordable housing have had a difficult time recently finding housing that they can actually afford. Millennials and those who lost their homes in the 2008 crash have driven up the cost of rental housing, while other existing homeowners took advantage of the low rates and have already refinanced. This removed many affordable homes from the market and kept many existing homes off the market.
Under the standard rule of supply and demand, the fewer homes on the market, the more their value. This is good news for existing homeowners but does not bode so well for those looking to purchase their first home.
The low down payment programs now offered, along with the continued low rates, have helped but there just aren’t enough homes available at the affordable range.
Help is on the way. Some builders who see an opportunity to fill the gap are now beginning to build more homes geared toward the first time homebuyer. Lenders should now be gearing up to work with, and service, these builders with loan programs needed to qualify their buyers.
The need for more affordable housing is gaining ground. That is good news for lenders and buyers alike. In addition, to help the financing of the new affordable housing, the low rates again offer more opportunities for another round of refinances, plus better financing options for move up buyers.
This is all great news for the housing market. For now, with the recent effects of Brexit, and the less than favorable employment news from April, mortgage rates should remain low. The big question is for how long? The Fed has hinted at another rate hike this summer. Will they? It’s anybody’s guess.
Now is the time to get moving. It’s lending time.
