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Is it going to get Better?

The questions on the mind of anyone in the market for a new home……. Is the market going to get better? Are rates going to go down? Will cost go down?   I don’t have a crystal ball, but by most indications the answer is no. The market is what it is and while rates may fluctuate a little, costs certainly aren’t going to go down to any extent. 

According to a recent article in BUILDER Magazine, with the median-priced home Currently at $435,750, 76.5% of all US households cannot afford to buy a new home. A price increase of only $1000 would make home buying unaffordable for an additional 106,000 households.  Some good news, as with all statistics this bad news doesn’t necessarily reflect what’s happening locally, in fact, Columbus OH happens to be one of the top ten cities for affordability in the country, but there are still issues. 

What makes a home unaffordable?

Affordability is based on many factors including the amount of down payment needed what the actual interest rate is what local taxes and insurance premiums are on the home and of course a person’s credit rating which significantly can impact what their final interest rate will be

There is a path to affordability

Especially as we move from a decidedly seller’s market to more of a buyer’s market with homes remaining on the market longer and sellers being more willing to reduce their price an avenue for anyone looking to maximize their ability to purchase is to seek seller contributions to help with defraying closing cost or even reducing interest rates.  While this option is available to any seller and the amount of contribution ranges from approximately 3% to as much as 9% most individual homeowners are either not interested or not willing to do this but it never hurts to ask. 

New Construction can lead the way

Home builders understand and have utilized seller contribution for years to offer lower interest rates,  pay closing costs,  and so forth and as they don’t wish to sit on inventory. The fact that they do not like to lower their price means that they’re more willing than most sellers to offer these contributions to purchasers of their homes.   

If you’re serious about a new home don’t give up besides seller contributions there are also programs offering down payment assistance as well.     

As you explore purchasing a new home or building with a builder it’s essential that you align yourself with a lender who understands the business very well and Partner with a realtor with the experience and knowledge to help you through this process.  Price is of course an important issue but for most of us the monthly payment is still the measure of whether we can afford a new home or not. Finding the right home with terms that make it more affordable could be your path. 

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