At its mid-December meeting, the Federal Reserve Board announced it would exert "patience" when deciding on raising interest rates. Chair Janet Yellen implied it would be early April before the board would again meet to discuss an increase in interest rates, which means that the first quarter of 2015 could mean the end of historically low interest rates. So, the window is beginning to close for refinancing. This is very critical for homeowners who have an adjustable-rate mortgage. Buyers who have been taking their time should consider how rising interest rates could impact their monthly payments and purchasing power.
People looking to buy their first home that are having trouble coming up with a down payment, there are new programs to assist them. In early December, Fannie Mae and Freddie Mac announced conventional loan down payment programs that will allow first-time buyers with good credit to qualify for a fixed-rate mortgage with a 3% down payment, rather than 5%.
The stipulations to qualify for the program are borrowers must meet first-time buyer requirements and they must reside in the home. Many states as well as national programs, offer grants that range from 1 to 5 % to be used for a down payment or closing costs. And that smaller down payments mean they will pay mortgage insurance on top of to the mortgage payment each month. The lightening of loan standards will allow more first-time buyers to enter the market.
It has been recognized that the millennial generation has been unlikely to buy homes. This group that has been hit with student loan debt, entering the workforce in a weak jobs condition and tightened lending standards during the financial crisis.
However, 2015 will hopefully be a year when millennials are more likely to become buyers. Rising rents, available housing inventory and life changes such as marriage and children will mean that it will make more sense for millennials to become first-time homeowners. The job market is also stronger now, and rent prices increasing.
People that lost their homes to foreclosure may find their way back into the market in 2015. Right now these former homeowners can qualify for FHA mortgages. But even buyers interested in a more affordable conventional loan who had a foreclosure seven plus years ago will now see the default events starting to come off of their credit reports. That could definitely begin to start an increase in new home buying. Low interest rates and down-payment assistance programs could tempt more buyers to enter the market, but sellers also have some advantages. Sellers have become wiser the past few years by using online real-estate tools such as Zillow to price their and list their homes.
If you would like information on your local real estate market, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you.
Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Max Broock in Birmingham, Michigan. See what past clients have to say about Stephanie Lang. Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate. you would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you.