For the past several years the first-time homebuyer
has been all but absent from the housing market. With high unemployment for younger workers
and restrictive and ambiguous mortgage credit policies, many millennials have
stayed out of the housing market. But,
that could all change in 2015. It
appears the landscape is perfect for the return of the first-time
homebuyer. Here are the key factors that will help the
first-time homebuyers in 2015:Low Interest Rates
Mortgage rates have fallen over the last several weeks to near-historic lows – helped by the plummeting price of oil. While interest rates are still projected to rise through the end of 2015, for now they are extremely low, making housing affordable.
Improving Employment
More jobs were created in 2014 than in any other year since 2000. And, employment for younger households had an even better year – the economy created the most civilian jobs for the 25-34 age range (an important group for first-time homebuyers) since 1987! Now that more millennials are working, they can afford to get out of mom & dad’s basement.
New Fannie Mae/Freddie Mac Programs
Both Fannie Mae & Freddie Mac have introduced mortgage programs geared toward the first-time homebuyer that requires only a 3% down payment. Down payments are often a barrier for would-be first-time homebuyers and this program will help out with that. Fannie Mae’s program is already available with Freddie Mac’s program set to begin in March 2015.
FHA Lowers Mortgage Insurance Premium
FHA announced that effective January 26, 2015, the mortgage insurance premium on a 30 year fixed rate mortgage will be reduced by 0.50% - from 1.35% - 0.85%. According to the National Association of Realtors, this will save the average homebuyer almost $1,000/year.
Down Payment Assistance Programs
Many states offer down payment assistance programs. In Illinois, the Illinois Housing Development Agency offers several down payment assistance program for first-time homebuyers.
2015 will be a great year for all homebuyers, but especially the first-time homebuyer. Give me a call today to make sure you are mortgage-ready. I can pre-qualify you for your mortgage and even refer you to a great Realtor to find your dream home! Contact me at BarkerLoans@gmail.com or 708.473.7688.
It’s also a great time to refinance – low rates, increasing property values and lower FHA mortgage insurance premiums make now an excellent time to save some money on your current mortgage!
