3 Great Reasons to Buy a Home Now

Buy a HomeIf you are thinking about purchasing a home and decided to wait until after the holiday season, you may want to think again….3 opportunities exist for the home buyer now that may not be available come 2014.

3 Great Reasons to Buy a Home Now

 
Fixed Mortgage Rates Declined

In Freddie Mac’s results of its Primary Mortgage Market Survey®, average fixed mortgage rates declined amid weaker manufacturing growth and declines in overall inflation rates.

  • 30-year fixed-rate mortgage (FRM) averaged 4.22 percent with an average 0.7 point for the week ending November 21, 2013, down from last week when it averaged 4.35 percent. A year ago at this time, the 30-year FRM averaged 3.31 percent.
  • 15-year FRM this week averaged 3.27 percent with an average 0.7 point, down from last week when it averaged 3.35 percent. A year ago at this time, the 15-year FRM averaged 2.63 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.95 percent this week with an average 0.5 point, down from last week when it averaged 3.01 percent. A year ago, the 5-year ARM averaged 2.74 percent.
  • 1-year Treasury-indexed ARM averaged 2.61 percent this week with an average 0.4 point, unchanged from last week. At this time last year, the 1-year ARM averaged 2.56 percent.

Lenders Loosen Down Payment Requirements

Lenders’ tight underwriting standards have been blamed for sidelining many potential home buyers the last few years. But lenders may be showing signs of loosening up a bit.

The average down payment on a 30-year, fixed-rate mortgage fell 2.74 percent from the second quarter to 15.73 percent of the home’s value in the third quarter, according to a new report from LendingTree.

“Lenders are putting more focus on purchase mortgages and are adjusting minimum requirements to attract borrowers,” says Doug Lebda, LendingTree founder and CEO. “With home values improving, the risk of borrowers defaulting on loans has decreased, giving lenders more confidence to lend with less cash down from qualified borrowers.”

According to LendingTree, the states with the highest home values are also where down payments remain the highest percentages of the property price.

Aging Homes May Present Big Bargains

More than 70 percent of the U.S. housing stock was built prior to 1990, and an aging housing stock may present more opportunities for buyers searching for a bargain, according to RealtyTrac’s Aging Homes Analysis.

“The high percentage of homes that are at least 20 years old and likely in need of some major repairs is eye-opening,” says Jake Adger, chief economist at RealtyTrac. “However, given the low inventory of homes available for sale in today’s market, this challenge of aging U.S. housing supply can also be an opportunity for buyers looking for a bargain and home owners looking to update their living space and improve the value of their homes.”

Older homes often need upgrades for energy efficiency and may lack floor plans or amenities that home buyers desire today, according to RealtyTrac’s analysis.

On average, homes built prior to 1990 sold for $233,211 this year, compared to $256,292 for newer homes.