Interesting situation in the current real estate market

Folks there is an interesting situation in the current real estate market. The blow-back from the market bubble burst has led many first-time home buyers to make some wise decisions in the past few years. The bubble burst has also led regulators to clamp down on the previously lax restrictions. Many potential buyers have held off on purchasing their first home and have taken some good steps toward functioning in the new market including: saving money, building credit, investing, and educating themselves on what a good purchase actually is versus market hype. While this is great, there have been some developments with updated regulations and other issues surrounding real estate.

 

First-time home buyers have expressed more interest in purchasing property in February with a higher traffic rate than any other time in the last four years. The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey has reported that much of the traffic is because of new Federal Housing Administration guidelines which go into effect this spring. While traffic is higher than it has been it is still unclear whether the increased interest in buying a home will actually translate to an increase in sales. Buyers looking at their first homes are typically dependent on lower down payment financing options such as those provided by the FHA.

 

The main concern is that new insurance guidelines for mortgages will restrict available credit due to an increase in payments. Another change in recent FHA guidelines is that borrowers with a credit score lower than 620 and a debt-to-income ratio higher than 43% will need to have their loans manually underwritten by the lender. The compensating factors for those seeking a loan will have to be documented by the lender. Also, for loans over $625,500 the minimum required down payment will increase from 3.5 to 5 percent. These changes in guidelines are to protect the Federal Housing Administration’s fiscal liability.

 

While investors and first-time home buyers have been experiencing a goodly amount of activity there has been a decrease in purchase activity from current homeowners. This may well change as there has been increased interest from current homeowners.

 

Even though interest is high for investors and first-time buyers we are seeing a severe lack of real estate inventory in addition to the difficulty in getting loans. Developers have stopped building new homes and many of the homes on the market in the last few months have been bought up by investors. So we have an increased level of interest at a time when it is now harder than ever to not only find a house but also get the financial backing to purchase. Luckily, we have experienced staff on hand to assist you, whatever your needs may be.

 

If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at tgreene@tedgreenelaw.com or just visit my website www.upsidedownca.com.