Spring has arrived, and the cherry blossoms aren’t the only things brightening up in the world of home buying! Fannie Mae has launched a program to make it easier to buy a home! The Portland housing market remains a hotbed of activity.
As always, we will review market conditions and current mortgage rates to help you decide whether it’s best to buy, refinance, or renovate, or wait!
Fannie Mae Simplifies Home Buying With “Day 1 Certainty”
To help home buyers, Fannie Mae has instituted a new program that makes the home buying process easier. The program is called “Day 1 Certainty” and is already in effect for qualified buyers.
It is now easier to provide documentation to your lender. Fannie Mae has streamlined the process of validating income, assets, and employment – meaning you no longer have to dig through files to personally send pay stubs and tax forms to your lender!
How have they done this?
Fannie Mae is working with participating employers directly to pull these files on your behalf. Essentially, they have cut out the middleman – which has traditionally been you, the buyer – from this administrative task.
Secondly, in response to the appraiser shortage we first discussed about a year ago, the appraisal process is now faster and cheaper.
Qualified buyers are now able to use electronic evaluations when shopping for homes. This relieves buyers of the need to wait months for an appraiser and shell out a large sum of money for the appraisal. (The current market rate for an appraisal is a whopping $750.)
This happens to be the technology that powers our “No Appraisal Loan” product, which similarly allows you to skip the usual appraisal process and close more quickly on your home.
Is Now a Good Time To Buy, Refinance, Renovate, or Just Wait?
As always, no magic button can instantly tell you the perfect decision for you right now. It depends on a host of factors including your goals, your values, and the current market conditions.
However, we can share important information to help you make the best decision you can using the data you have now. If you want to talk it through with a genuine, knowledgeable person, we are always glad to listen and advise.
“…home prices are continuing to rise faster than wages…”
Let’s review the current market against your current situation to help you make an informed decision.
The Case AGAINST Buying Now
The Portland housing market is still extremely active, with home sales soaring in February (more than 1,800 sold, an 8.2% increase over 2017).
The market is still densely packed, with low inventory brushing up against high demand and requiring some buyers to make offers above list price.
30-year mortgage rates have risen steadily all year, beginning the year at under 4.0% and currently sitting at 4.4% (and rising). To be clear, Portland is not an extremely generous market for buyers today.
The Case FOR Buying Now
Taking into account everything listed above, you may be understandably asking yourself, “How could it possibly be a good decision to buy now?”
Believe it or not, it just might be – especially if you are hoping to buy in the near future (say, within 6 to 12 months). Key factors suggest the market will only get more challenging for buyers.
Mortgage rates are forecasted to continue rising throughout the year, ending in December as high as five percent! That’s more than a half-point increase on rates today.
On a sale as big as a home, that’s a significant amount you could save by acting sooner than later.
What’s more, home prices are continuing to rise faster than wages, meaning the gap between the average home price and the average personal account balance is likely to continue increasing (or, moving in the wrong direction) the longer you hold off.
The Portland housing market is no paradise for home buyers today. However, based on widely available projections, the conditions today are better now than they are going to be for the near future.
Therefore if you want to buy a home in Portland, the financial forecasts suggest that you could save significant money by acting soon. With that said, what’s the right decision?
If you are on the fence about buying a home: Heavily consider buying soon before the rates and prices continue to rise as expected throughout the year.
If you are in a home already and looking for a move-up home: You are in the enviable position of having a big chip already! Instead of jumping to buy now, it may be wise to wait out the surge, invest in home renovation projects to improve your quality of living and resale value, and move when home prices have cooled down.
That said, if you sell your home now, you’re likely to fetch a higher sum that may offset the higher price of your new home. You are in better shape already having a home.
If your current mortgage rate is higher than 4.4%: Consider refinancing. You may be able to save significant money in the long term by locking in a lower rate now.
Remember, no one can predict with certainty what the future will hold. An always-effective strategy is to review the important information available and see how well it fits with your own goals, wishes, and dreams.
Always talk to someone you trust and consider your plan carefully before making any decisions. The Unitus Mortgage team is always available to help. Just call us at 503.423.8713.
Posted By: Brad Goodenough
About the Author: Brad joined Unitus Mortgage in November of 2013. He began as a dedicated mortgage originator and has developed into a results-oriented sales manager focused on maintaining a high level of service and integrity across the Home Loan team.
Throughout his career in financial services he has gained expertise in multiple lending platforms and local housing markets. He owes his success to his first professional priority: to add value to his community by sharing knowledge and always providing honest, reliable information.