It’s always in your best interest to speak to a professional when preparing to buy your first home. But if this is your year to join the ranks of homeownership, getting advice early in the process could be critical. A number of real estate trends on the local, regional and national levels will likely make the home buying process a little more challenging than usual.
Origin Bank offers a number of resources for prospective homebuyers, including our free financial calculator. We’ve also compiled a few things that first-time buyers should keep track of as they prepare to enter the market. Ask your agent and lender how these trends affect your journey to a new home.
Tight inventories are driving markets. Home sales throughout the Gulf Coast were already heating up before the devastating floods in Louisiana in 2016, followed by hurricanes Harvey in south Texas and Irma in Florida last year. The upshot is that the number of homes available for sale is low, which drives prices higher. First-time buyers might need to save more for a down payment. In addition, they’ll probably have to compete with more seasoned homeowners who are also in the market.
The number of new homes being built nationwide is increasing, which is good news for first-time buyers. The federal government’s monthly report on annual housing showed nearly a 10 percent jump nationwide in January and a 9 percent increase in the Southern region. Housing permits, a key measure of future construction, rose by nearly 22 percent in the South. When more homes are for sale it takes pressure off the market, and experts predict builders will put more focus on homes for lower to middle income buyers.
Mortgage rates remain historically low, but they’re edging higher. While the trend is in line with experts’ forecasts, the question becomes how high rates might move. Late last year, the national average was just below 4 percent on a 30-year, fixed-rate mortgage. At the time, experts predicted that rates would spend much of 2018 in the 4.5 percent range. By mid-February, the average was already up to 4.38, according to Freddie Mac.
The federal tax law approved last year might affect your buying strategy. The legislation included changes to the way deductions are made for mortgage interest and property tax, which may impact other homeowners’ ability to buy and sell, as well. Talk to a licensed mortgage loan originator about the new law and how it could affect your income and taxes if you do buy a home.
Buying your first home is one of the most exciting times of your life. Origin Bank is here to help make that dream a reality. Contact Origin’s lending experts today, and find out how we can help make sure you have as much buying power as possible.