Spring has finally arrived and we are entering into the busiest real estate season of the year. As the weather warms up so does the real estate market. All the signs of spring are starting to show themselves, and they’re not what you’d think. We are talking about budding trees, flowers and longer sunny days, we are talking about for sale signs in from of homes. A healthy rebound is forecasted for the spring real estate market and here are some of the reasons why.
1- Mortgage Affordability
The first quarter of 2015 has seen an introduction of many affordable mortgage options. In January the FHA announced a drop in the annual mortgage insurance premium. This lowers the debt to income ratio for mortgage applicants and makes their chance of being approved for a mortgage higher. The introductions of low down payment programs from Fannie Mae and Freddie Mac have made it possible for thousands of families to enter into homeownership with down payments as low as 3%.
2- Job Growth
There has been an increase of over 250,000 new jobs per month for over a year now. In addition to new jobs there has also been an increase in the average hourly rate employees are being paid. This increase in employment and salary means that many people now have a means to be approved for a mortgage.
3- Threat of Rising Interest Rates
Although interest rates are predicted to remain historically low for an extended period of time, rates have begun to rise from their all time lows. Many economists are expecting the Fed to raise the prime rate in June. With this “threat” impending many buyers are wanting to lock in lower interest rates before then. This may lead to an even higher demand amongst buyers this spring.
4- Pending Sales
The number of pending sales has been steadily rising throughout the start of 2015. The National Association of Realtors has announced that pending home sales have increased despite estimates of them dropping. A high number of pending sales in the first quarter is indicative of sales increasing throughout the spring and summer months to follow. The combination of homeownership becoming more affordable while home prices and mortgage rates remain low indicate an active and busy time for the spring real estate market.
For expert opinion and guidance, contact Aceland mortgage.