Exciting New Trends for the Current Homebuyers

 The current housing market is starting to cool along with the buyer frenzy. Professionals in the industry have three trends that can benefit a buyer when they go to buy a home.

1. More Homes To Choose from

For the past several years, the housing market has hit a record low in housing inventory. This coupled with high buyer demand made it hard to even find a home to purchase. The Calculated Risk reported that homes for sale increased by 39.5% in the last week of October 2022 from the same time in 2021. It is still a seller’s market, but the good news for buyers is that there is more inventory to choose from when finding your new home.

2. Bidding Wars Have Eased

With the demand for buyers over the past several years came huge bidding wars. Luckily, for buyers today, things are different. According to the National Association of Realtors (NAR) the offers on sold homes have declined recently. This fall, September showed the average was 2.5 offers per sale, which was down from the 3.7 offers per sale from last September 2021. Since this has started to slow down, the bidding wars are as well, making it a great time to get back into the market and search for a home without the huge influx of competition.

3. More Negotiation Power

When there is less competition for buyers, then there is more negotiation power on your side. The last couple of years has seen buyers willing to skip things like appraisals and inspections in order to win a bidding war. The National Association of Realtors (NAR) shows that buyers in today’s market are not waiving all contingencies. Appraisal and inspection are two very important factors when it comes to purchasing a home. A survey from Realtor.com shows that 95% of current sellers are accepting a house inspection from a buyer. Sixty-seven percent of sellers negotiated with buyers on repairs found during an inspection.

There are still challenges buyers must face in today’s market, but they are becoming more scarce. Now is a great time to purchase a new home, first find a local realtor who can help you on your journey to getting your dream home.

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Friendly Lenders For Potential Home Buyers

According to the Urban Institute Housing Finance Policy Center, mortgage lenders are becoming more flexible with riskier applicants. Their quarterly credit availability report found that they are lending to people with lower credit scores, higher debt-to-income ratios and smaller down payments.

The report finds that the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) and the Department of Agriculture’s rural home loans are taking the highest risk levels since before the crash. In fact, Fannie Mae and Freddie Mac have steadily taken more risk since 2009. This is great news for potential home buyers, especially those with less than perfect credit scores.
“Significant space remains to safely expand the credit box,” Laurie Goodman, vice president of the Housing Finance Policy Center, says.

The current lender risk levels are very low and will still stay within the “reasonable lending standards.” Loan officers around the country have seen a creative side to the lending industry recently which gives the “credit-strained buyer” hope. John Meussner, executive loan officer with Mason-McDuffie Mortgage Corp. in San Ramon, California, says he has seen a perfect example of this.

“Recently we saw one investor roll out a product offering up to $2 million in financing for FICO scores down to 600,” said Meussner.

The loan mentioned, will allow the borrower to have made a late payment on a mortgage within the past year and have major incidents such as foreclosure or bankruptcy. Many lenders will now take a score in the mid-500s with a small down payment. In the past, Fannie and Freddie have required a FICO score of around 750 to obtain a home loan.

The requirements might be a little less risky but lenders are still doing their homework on their potential borrowers. Paul Skeens, president of Colonial Mortgage Group in Waldorf, Maryland believes that the attention to documents in unbelievable detail has kept the market from seeing a lot of defaults.





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