2018 Home Buying Trends, Part 2

Close-up of male realtor is showing a contact with key from new apartment.

In our last blog entry, we discussed several trends facing the mortgage world in the year 2018. These trends are particularly vital for first time home buyers, who have not navigated these waters before and need all the pertinent information they can get on the subject of mortgages.

At Altius Mortgage and our partners at Mortgage Ogden, we’re dedicated to helping all buyers get the home loan they deserve. Here is part two of our blog series on important 2018 mortgage trends to be aware of.

FHA Loans Are More Expensive

In 2017, then-President Obama approved a reduction in FHA mortgage insurance that would have brought major savings to borrowers. Unfortunately, President Trump quickly canceled this reduction upon takin office. This means that first time buyers who use the FHA program will have to continue to pay higher mortgage insurance levels – this is imperfect, of course, but far lower down payments and other benefits still make FHA loans well worth it for many borrowers.

Real Estate Agents Matter

The housing world has changed a ton over the last few years, with markets fluctuating between shortages and overages of inventory. There’s never been a more important time to have a real estate agent on your side to provide an experienced, objective view of the marketplace. When you consider that the seller generally pays agent commissions, this is an even simpler choice to make.

Inventory is Limited in Big Cities

Many big cities entered 2018 with relatively low supplies of housing, though there are exceptions here. This can affect everything from your first offer to your negotiating power as a buyer – sellers tend to have more leverage in a tighter market with limited inventory.

Credit Scores

Most closed home loans in 2017 were to buyers with credit scores of 600 or higher, with over 99 percent of mortgages going to this group. As such, while a score in this range is not necessarily a steadfast requirement, it’s about as close as you can get – you should ensure you’re in this range if you’re considering buying.

For more on 2018 housing trends, or to learn more about any of our mortgage services, speak to the pros at Altius Mortgage today.

2018 Home Buying Trends, Part 1

A house on top of a table with mortgage application form, calculator, blueprints, etc..

At Altius Mortgage and our partners at Mortgage Ogden, staying on top of housing trends is one of our many points of pride. Our clients need experts with a current view of the mortgage world, plus an idea of how the market will move going forward.

This is especially important for the first time home buyer, who hasn’t navigated any of these common issues before. With that in mind, let’s get into part one of a two-part blog series on several 2018 housing trends that are looking likely, and what they might mean for you as a first time home buyer.

Debt Limits Going Up

Back in July 2017, government-sponsored Fannie Mae announced it would start accepting borrowers with a debt-to-income ratio of 50 percent, up from their previous limit of 45 percent. Debt-to-income ratio refers to how much of your monthly income is tied up in various forms of debt, and lighter standards here mean more people will be eligible for basic mortgage loans.

Prices Still Rising – But Slower Than Before

As expected, home prices will continue to rise in 2018. But this is normal, and the larger factor here is actually the rate of this growth, which will actually be slower than usual. Most experts expect home prices to rise by about 3.5 percent this year, and up to 5 percent in some places. While this is a slow-down on increases from prior years, know that it can still affect your buying power.

Qualifying is Getting Easier

In multiple areas, mortgage lenders are making it easier to get approved for a loan. Areas like down payments and maximum debt levels have allowed easier access for a larger portion of the population.

Down Payment Numbers

In the past, it’s been considered standard that you need 20 percent of the total purchase price saved up to put as a down payment. Today, however, there are numerous down payment assistance programs that can help you lower your down payment as low as 3 percent, or even less for military members or veterans.

Rates Expected to Rise

Do know that mortgage rates are expected to marginally rise in 2018. Rates are expected to climb just above 5 percent during the back half of the calendar year, something buyers should keep an eye on.

For more on mortgage trends for first time buyers, or to learn about any of our mortgage services, speak to the pros at Altius Mortgage today.