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Rising mortgage rates add to the challenge of buying a home

But some shoppers – especially first-time buyers – may decide to wait until higher prices help lower prices later in the year. The largest percentage of homebuyers is millennials aged 21 to 40many of them are first-time buyers, according to the National Association of Realtors.

“Spring is going to be very interesting,” said Lawrence Yun, chief economist for the Realtors Association.

Ultimately, the housing market needs to increase inventory, Mr. Yun said. “We need a supply of vacant homes.” The builders had to face challenges in keeping newly built homes affordable includes the high price of lumber and the difficulty of finding construction workers.

Buyers may need to consider more affordable homes in less urban areas, Mr. Yun said. That may depend on whether the homeowner expects to be able to continue working remotely.

One variable in home sales is the easing of mortgage bans issued during the pandemic. Many landlords have been able to resume payments after the payment pause has expired. But some may not be able to, forcing them to sell their homes, said Michael Fratantoni, chief economist for the Mortgage Bankers Association. The number of borrowers in Ring has decreased, to an estimate 705,000 homeowners by the end of 2021.

As always with real estate, the conditions vary. Agents in some hot markets say the rate hike could take time to affect prices as some buyers don’t need the financing to buy a home. Kyle Schelvan, an agent with Asa Team, part of eXp Realty, in Orlando, Fla., said homes in the area are often bought by people who have sold homes elsewhere and are using their cash. to buy a home in Florida. Traditional buyers sometimes have to take steps they once consider illogical, he says – like buying a tenant-occupied home and waiting for months on a lease to expire so they can move in. “It was a challenge,” he said.

Here are some questions and answers about mortgage rates and the housing market:

Adjustable Rate Mortgages or ARM, which offers a fixed interest rate for a certain period of time before switching to a variable interest rate. Loans got a bad name during the 2008 housing crisis because some lenders gave them to unqualified buyers who couldn’t afford to pay higher when interest rates spiked. Mr. Walden at Black Knight said lingering skepticism about adjustable loans, combined with low interest rates on fixed-rate mortgages in recent years, has put ARMs out of favor. Mr. Walden at Black Knight said.

https://www.nytimes.com/2022/02/18/your-money/home-buying-mortgages.html Rising mortgage rates add to the challenge of buying a home

Fry Electronics Team

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