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Lending Requirements Remain Tight In Hot Housing Market
The hardest part of buying a home at the moment is finding one that is available and that you can afford. However, getting the mortgage is harder than usual as well. Lenders are maintaining very tight financial requirements for borrowers, and entry level mortgages for affordable starter homes are hard to come by. Its very important to start mortgage shopping and get pre-approved before you go to view houses.
30 Year Fixed Mortgage Rate
|Change From Yesterday||-0.032%|
|Change From One Week Ago||-0.002%|
|Change From One Year Ago||-0.174%|
15 Year Fixed Mortgage Rate
|Change From Yesterday||-0.020%|
|Change From One Week Ago||-0.018%|
|Change From One Year Ago||-0.399%|
Today’s Financial Headlines
How people pay their rent can help determine if they are credit worthy for a mortgage. Fannie Mae is introducing a new parameter to its loan qualification process. For the first time, a mortgage underwriter will now consider rental payment history when making loan decisions. For some borrowers with thin credit profiles, this change will finally allow them to buy a home.
The current housing supply shortage has been brewing for the last 7 to 8 years, according to a chief economist. The problem is related to a slow down in new home construction. There is less demand for new construction, supplies have become more expensive, and there is a severe labor shortage in the construction industry. There are no short term solutions to this complex situation. Until the labor shortage is addressed, housing supply will remain low.
Starter Homes Are The Most Difficult Properties to Find and Finance In The Current Real Estate Market
The housing supply shortage is most dire in the area of starter homes. Construction trends have veered towards apartments, condos and high-value homes. There are very few starter homes on the market, and even less of them are being built. This supply shortage is further complicated by the fact that many mortgage lenders are unwilling to write “low value loans” for less expensive affordable housing options.