“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market… The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

Terry Loebs, Founder of Pulsenomics:

“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

“Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

• The Home Price Expectation Survey says that prices will appreciate by 5.8% this year.
• The Freddie Mac Outlook Report is looking for home prices to appreciate by around 7% in 2018.
• The CoreLogic HPI Forecast indicates that home prices will increase by 5.2% on a year-over-year basis.

Bottom Line

“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

• The average down payment for first-time homebuyers is only 6%!
• Despite mortgage interest rates being over 4%, rates are still below historic numbers.
• 88% of property managers raised their rents in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights

• The average down payment for first-time homebuyers is only 6%!
• Despite mortgage interest rates being over 4%, rates are still below historic numbers.
• 88% of property managers raised their rents in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights:

• The average down payment for first-time homebuyers is only 6%!
• Despite mortgage interest rates being over 4%, rates are still below historic numbers.
• 88% of property managers raised their rents in the last 12 months!

“Before you buy a home, it’s important to find out if you can afford the monthly mortgage payment. To do this, some financial experts recommend your housing costs — primarily your mortgage payments — shouldn’t consume more than 30 percent of your monthly income.”

Bottom Line

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

1. Capacity: Your current and future ability to make your payments
2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
3. Collateral: The home, or type of home, that you would like to purchase
4. Credit: Your history of paying bills and other debts on time

Bottom Line

Bottom Line

Myth #1: “I Need a 20% Down Payment”

“Consumers are often unaware of the option to take out low-down-payment mortgages. Only 19% of consumers believe lenders would make loans with a down payment of 5% or less… While 15% believe lenders require a 20% down payment, and 30% believe lenders expect a 20% down payment.”

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Bottom Line

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

1. Capacity: Your current and future ability to make your payments
2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
3. Collateral: The home, or type of home, that you would like to purchase
4. Credit: Your history of paying bills and other debts on time

Bottom Line

• 40% of millennials who purchased homes this year have put down less than 10%.
• 76.4% of loan applications were approved last month.
• The average credit score of approved loans was 724 in September.

Some Highlights

Many potential homebuyers believe that they need a 20% down payment and a 780 FICO® score to qualify to buy a home, which stops many of them from even trying! Here are some facts:

• 40% of millennials who purchased homes this year have put down less than 10%.
• 76.4% of loan applications were approved last month.
• The average credit score of approved loans was 724 in September.

Some Highlights:

• 40% of millennials who purchased homes this year have put down less than 10%.
• 76.4% of loan applications were approved last month.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

“Defaults on recent low down payment loans, so far, are slow, but that is as much a factor of the good credit quality as it is the strength of the housing market. Home prices are rising incredibly fast, meaning those borrowers are gaining equity in their homes quickly.”

Bottom Line

Bottom Line

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights:

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!

Bottom Line

"There are just not enough homeowners deciding to sell because they’re either content where they are, holding off until they build more equity, or hesitant seeing as it will be difficult to find an affordable home to buy... As a result, inventory conditions have worsened and are restricting sales from breaking out while contributing to price appreciation that remains far above income growth.”

Bottom Line

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

1. Capacity: Your current and future ability to make your payments
2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
3. Collateral: The home, or type of home, that you would like to purchase
4. Credit: Your history of paying bills and other debts on time

Bottom Line

Myth #1: “I Need a 20% Down Payment”

“There are many mortgage-ready renters today, but they don’t know it. Often, homebuyers remain sidelined for years due to the down payment.”

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Bottom Line

Price Appreciation = Good News for Homeowners

“One million borrowers achieved positive equity over the last year, which means risk continues to steadily decline as a result of increasing home prices.”

“Homeowner equity increased by $766 billion over the last year, the largest increase since Q2 2014. The rising cushion of home equity is one of the main drivers of improved mortgage performance. Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.”

This is great news for homeowners! But, do they realize that their equity position has changed?

“This is only the second time in the survey’s history that the net share of those saying it’s a good time to sell surpassed the net share of those saying it’s a good time to buy.”

78.8% of homeowners have significant equity (more than 20%) in their homes today!

“High home prices have led many consumers to give us the first clear indication we’ve seen in the National Housing Survey’s seven-year history that they think it’s now a seller’s market. However, we continue to see a lack of housing supply as many potential sellers are unwilling or unable to put their homes on the market…” 

Bottom Line

Bottom Line

The best way to ensure that your home-buying process is a confident one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher,’ and who puts your family’s needs first.

The best way to ensure that your home-buying process is a confident one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher,’ and who puts your family’s needs first.

What is PMI?

“An insurance policy that protects the lender if you are unable to pay your mortgage. It's a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%. Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

“It's no doubt an added cost, but it's enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!
• The credit score requirements for mortgage approval continue to fall.

Some Highlights:

• Interest rates are still below historic numbers.
• 88% of property managers raised their rent in the last 12 months!

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

The survey also revealed 3 key takeaways:

1. Those most likely to buy are ‘Older Millennials’ (ages 27-36) or ‘Generation X’ (ages 37-52)
2. Minorities, particularly African-Americans, were twice as likely to respond that they were considering purchasing a home this year than white respondents.
3. Many potential buyers believe they need to put 20% down and need to have perfect credit to own and are unaware of programs that would allow them to buy now.

“Having kids and raising a family is a primary reason why Americans take the leap into homeownership—many consider it a key component of the American dream.”

Bottom Line

Myth #1: “I Need a 20% Down Payment”

Myth #2: “I need a 780 FICO Score or Higher to Buy”

Bottom Line

“Closing costs, also called settlement fees, will need to be paid when you obtain a mortgage. These are fees charged by people representing your purchase, including your lender, real estate agent, and other third parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

• Government recording costs
• Appraisal fees
• Credit report fees
• Lender origination fees
• Title services (insurance, search fees)
• Tax service fees
• Survey fees
• Attorney fees
• Underwriting fees

Is there any way to avoid paying closing costs?

Bottom Line