In recent years, a large number of homeowners have turned into renters.
Many of those consumers have expressed a strong desire again to own a home, but despite favorable aspects in today's market, many renters are holding off on purchasing a home.
Key considerations are the rising of homes, the lack of inventory in many markets, concerns about the required down payment and qualification for obtaining a mortgage loan.
"Lofty home-price growth and tight supply are leading to softening confidence among renters about whether it's a good time to buy a home," according to the latest installment of the National Association of Realtors Housing opportunities and Market Experience home survey.
"The survey also found that a misconception about how much of a down payment is needed to buy could be unnecessarily delaying some young adults from entering the market."
In NAR's third quarter home consumer survey, respondents were asked about their confidence in U.S. economy and various questions about their housing expectations, including a series of questions related to down payments and the amount of money they believe they need to purchase a home.
"During the autumn months, the share of homeowners and renters who believe now is a good time to buy remains at a solid majority but has crept downward since the beginning of this year. Seventy-eight percent of homeowners and 60 percent of renters said it's a good time to buy. In the inaugural home survey in December 2015, 68 percent of renters said it was a good time to buy."
Lawrence Yun, NAR chief economist, says it's clear the ongoing run-up in home prices and severe inventory shortages in a large portion of the country are hitting consumer psyche — especially among renters.
"This summer's historically low mortgage rates injected some additional demand into the market, but the dearth of homes for sale continues to keep a lid on sales but not prices," he said.
Q: Is it true that mortgage interest rates recently lowered again?
A: Yes, rates moved down again. Freddie Mac released the results of its Primary Mortgage Market survey, showing the average 30-year fixed mortgage rate falling as the FOMC decided to leave short-term rates unchanged.
The 30-year fixed rate mortgage averaged 3.42 percent with an average .5 point for the week ending September 29, 2016, down from last week when it averaged 3.48 percent. A year ago at this time, the 30-year FRM averaged 3.85 percent.
The 15-year FRM this week averaged 2.72 percent with an average .5 point, down from the last week when it averaged 3.07 percent.
Q: Is there any update information available on the HAMP program?
A: Yes, a recent news release addressed this point:
"The Mortgage Bankers Association unveiled, 'One Mod: Principles for Post-HAMP Loan Modifications,' which is a proposed successor program to the HAMP. One Mod draws upon the experiences if lenders familiar with HAMP to formulate universal principles that should be applied to a future program.
"One Mod was developed by the Future of Loss Mitigation Task Force, a diverse MBA working group consisting of representatives from 20 member companies. The program offers at least 20 percent payment reduction for eligible borrowers while minimizing the excessive documentation requirements that have caused hardship for HAMP applicants,"
Q: Is buy a home becoming more affordable?
A: The reports on that subject are mixed at this point. Here's an example:
"ATTOM Data Solutions, a housing data and the new parent company of RealityTrac, on September 28 released its Q3 2016 Home Affordability index, which shows that 24 percent of U.S. county housing markets were less affordable than their historic affordability averages in the third quarter.
"That's up from 22 percent of markets in the previous quarter and up from 19 percent of markets a year ago to the highest share since Q3 2009 — when 47 percent of markets were less affordable than their historic affordability averages."
COPYRIGHT 2016 CREATORS.COM