Housing Market Changes in Second Quarter of 2023
Now we see indications that mortgage loan interest rate trends are coming back down to earth in Q2 2023.
CNBC reported on April 12, 2023, “Incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30% — the lowest level in two months,” according to the CNBC article titled, “Homebuyer mortgage demand jumps after interest rates drop to two-month low.”
What’s Ahead for Housing Markets?
Looking at the CNBC-reported stats showing home loan applications rising week over week you might think that an overall improvement trend has started.
But these numbers are still well over 25% lower than what was reported from the same seven-day period in 2022. We’re still looking at a potential for limited housing inventory and strong competition for that inventory.
But should you worry about all of that if you don’t have a down payment fully saved yet or a home you want to make an offer on? The short answer is no.
The State of the Housing Market
If you aren’t ready to commit, the current state of the real estate market has no relevance to you...yet.
Before you feel ready to start house hunting, you’ll want to consider that even when conditions are improving. Are you afraid of missing out on a deal? A lower rate? Until you are ready to commit, those factors won’t mean anything.
Even when mortgage loan interest rates are falling, you should take some important steps to hedge your bet before making an offer on a home. There’s no telling when conditions might get more unpredictable as the housing market recovery gets underway.
How to Prepare
Some bargaining tactics you might use successfully when there is little competition for the home you want to buy may still be a hard sell in today’s market, even with the improvements we are seeing.
Were you counting on getting a six percent seller concession on closing costs? It may be smart to consider saving that money and not asking the seller to pay.
Are you worried about credit qualifying for the mortgage? A larger down payment is often a good compensating factor. FHA loans typically require a 3.5% minimum down payment. Saving more than this is highly recommended.
Anticipate having to make a higher down payment just in case, take some extra time to plan and save, and come to the application process with the ability to make that larger down payment. It could help the lender justify approving your mortgage.
Annual Income Requirements for FHA Loans
Good Credit History Helps Get FHA Loans
Stay Informed About Your Mortgage Closing Costs
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