Here's this week's roundup of news and resources, just for you.
Quick takeaways:
Homes selling faster than ever, but market should ease soon.
Student debt shouldn't stop buyers from qualifying for a mortgage.
Buyers can take on existing mortgages, get lower rate and term.
Fed expected to keep rates low for the next few years.
Baby Boomers benefitting the most from selling in a hot housing market.
Read on for our coverage.
Homes Selling at Light Speed
Homes sold last month in an average of only 20 days on the market, compared to 36 days at this time last year. But that may relax as higher prices and interest rates make housing less affordable. Also helping: more inventory hitting the market, as builders add new homes and owners begin selling again post-pandemic. 1
Buying With Student Debt
Many first-time homebuyers carry significant student loans. That can affect their debt-to-income ratio (DTI), and a DTI over 43% can make it harder to get mortgage approval. However, borrowers with DTIs of up to 50% can still qualify for FHA or HomeReady loans if they have a good credit score and can make a larger down payment. Borrowers should connect with a loan officer early to help discern their best options.
Buyers Can Assume Mortgage
Instead of originating a new mortgage, buyers can (in certain cases) take on a seller's existing loan. This gives them a lower rate and shorter term than they might otherwise receive. However, they must pay the difference between the loan balance and the purchase price upfront. Additionally, only government-backed mortgages are assumable, not conventional ones. 3
Dovish Fed Staying Course
Mortgage industry economists see encouraging signs in the Fed's commitment to keep interest rates low for the foreseeable future. Some don't expect a rate hike until as late as 2023 or even 2024. Even as the Fed sees a positive economic outlook, its reluctance to raise rates indicates a focus on full employment instead of inflation worries. 4
Hot Market Benefits Boomers
Baby Boomers are reaping the benefits of a record seller's market, according to a survey by the National Association of Realtors. That generation makes up 43% of home sales as they retire and move closer to family. They made a median profit of $66,000, $6,000 higher than at this time last year. 5
Have any questions? Reach out to us. We are your home loan experts and are up to date with all the market industry information. kevnik@kevnikmortgage.com
Sources: 1 cnn.com; 2 themortgagereports.com; 3 themortgagereports.com;
4 housingwire.com; 5 realtor.com
