According to the US Census bureau's third quarter housing report released this week, home ownership rates in America are down to their lowest point in 19 years. Sounds like bad news for buyers and sellers alike, right? Not so fast...a closer look reveals that buyer behavior has more to do with it than strict market conditions.
Mortgage rates have been stable over the last 18 months, and are still at near-historic lows -- yesterday's advertised rate for a 30-year fixed mortgage at one local bank was 4% - exactly what it was in June of last year. In addition, lending standards have loosened considerably over the last year. We are seeing bridge loans, asset-based underwriting, and first-time homebuyer products hitting the market for the first time since 2008. In fact, USDA, FHA and MA Housing all now offer low-to-no down payment products with little or no PMI. The bar for first time homeownership has not been lower in many, many years.
So why are ownership rates so low? According to industry analysts, it is the changing life choices of millenials that are driving market conditions. Young people are getting married later, having children later, and consequently waiting longer and longer to buy a home. Sam Zell of Equity Residential was quoted in Bloomberg as saying that "the deferral of marriage has...a staggering impact on real estate."
There hasn't been a better time to buy a home in recent memory - near-historically low interest rates, continually loosening lending and underwriting standards, and a balanced local inventory ensure that you can find a home at a good price, finance it at a great rate, and put very little money down.
As always, if you are thinking of buying, give us a call - we would be delighted to answer your questions, and help you take advantage of this excellent market. We look forward to hearing from you!