According to a report I recently read at Yahoo! Finance, Gen-Yers might need to take notice of their surroundings. Fifteen years from now, they are going to be kicking themselves in the butt for continuing to live in the spare bedroom at their parents, and waiting to buy a home. Mortgage Interest Rates will never be this low again in their lifetime – and they will be at a cocktail party in the future with some extended excuse about why they missed the “big one.” NC First Time Homebuyers need to act quickly if they don’t want to caught a dollar short in the Real Estate Boom. Why do we say this? Because since April 1, 2013:
- Home Prices in North Carolina have gone up – Inventory for NC First Time Homebuyers is pretty much at a 5 year low. This means that within the First Time Homebuyer Price ranges, for most of NC – there are fewer homes to choose from, and there’s more competition. So getting that ROCK BOTTOM price, is not happening as often.
- Mortgage rates have gone up – Significantly. A fixed rate Government Mortgage loan is 1.25% of interest higher than it was 13 days ago. For every 1% in interest rate, you give up about 10% in home price that you qualify for. The 30-year, fixed-rate mortgage posted its largest weekly increase since April 17, 1987.
- USDA No Money Down Program is changing Oct 1 – over 25% of NC neighborhoods that currently qualify for USDA Home Loans will no longer qualify for this program as Congress redefines the meaning of Rural. If the Farm Bill passed Congress last week – we might have gotten a reprieve on this massive change… but sadly, it didn’t.
- FHA PMI rates have gone up – FHA PMI rates are about as high as I’ve ever seen them. The upfront cost (that’s added onto the loan) is 1.75%. The monthly fees for a Minimum down loan at 30 years is 1.3%
- FHA Underwriting guidelines have gotten tighter. The NCFHA NC First Time Homebuyer Program tighten guidelines in April now requiring 640 middle credit scores, however – for those who qualify, the program offers below market mortgage interest rates, mortgage tax credits and a 3% forgivable grants to cover your down payment.
While prices for homes across NC have gone up, we’ve also seen a significant rise in purchases for non-distressed properties. Foreclosed homes and short sales in many price points are almost non-existent. At last check, there were fewer than 20 homes in Raleigh that were part of the HUD Home Store / FHA Foreclosed properties. This is a SIGNIFICANT drop in foreclosed homes on the market.
While non-distressed property purchases have increased, first-time homebuyers have become less active in the non-distressed property market. The share of non-distressed property home purchases from first-time homebuyers is down to 33.6 percent in October from 38.7 percent in June.
The survey highlighted two key factors to explain the decrease in non-distressed property purchases from first-time homebuyers. One has to do with higher prices for homes that are not in distress.
The other problem is with tighter underwriting guidelines. especially those for NC first time Homebuyers. NCHFA changed the minimum credit score requirements in April, and it now takes a minimum of 640 middle credit scores to qualify for the program. Does that mean that if you have a 632 credit score you can’t buy a house? NO! We can work with the compensating factors that FHA uses, we can normally get folks who are reasonably qualified into a home 🙂
Because FHA does have the most lenient underwriting guidelines, many NC first time homebuyers look first to the FHA loans that will allow for gift funds and grants for their 3.5% downpayment. They will also allow non-owner occupied Co- Borrowers which really helps the Gen Yerrs who are grad students and want to buy a house before they get a “real job.”
Hey Gen Yerrs – What are you waiting on??? It’s Time To Buy A House! Have more questions about buying a house in NC or how to get your folks to help you buy a house? NC First Time HomeBuyer , We GOT YOU! Call Steve and Eleanor Thorne 919 649 5058 – we’d love to help you make your dreams of homeownership come true!