Historically low mortgage interest rates have been a lifeline for many Midlothian first time homebuyers in recent years, keeping home ownership within reach for many who wouldn’t have otherwise been able to make the leap. For them, and for all the other than first time area homebuyers, the fact that home values have continued to rise has been an added boon.
But, as just about every mortgage industry expert will tell you, the gig is almost up for those rock bottom rates. Yet the question for many first time homebuyers remains: is it time to buy or not?
It’s a good time to take a hard look a few of the known facts—
According to web giant Zillow, as of Q1 2015, potential home buyers should expect to spend about 15% of their income on a mortgage for an average home in the U.S. When you compare this with the historical averages, it makes today’s rates temptingly low: the typical percentage has been closer to 21%. In terms of dollars spent monthly, that’s a big (and terrific) difference!
At the same time, the historical average has a typical renter shelling out 24% of income. Today, that’s closer to 30%…making first time homeownership that much more inviting.
Taken together, Zillow’s new calculations definitely appear to make finding a home to buy the more affordable option. On the other hand, it’s also true that a number of factors work against first time homebuyers—in Midlothian and nationwide. College debt, for one, is far more of an obstacle than it used to be. And the other side of those all-time high monthly rents in many places are making it that much harder for would-be first time homebuyers to save for a down payment. But with the widespread phenomenon of growth in rents outpacing growth in home values, the rental affordability problem isn’t likely to improve any time soon. With mortgage rates likely to be on the increase as early as this fall, the long term outlook may not grow rosier as time passes. The implied takeaway: strike now while the iron is hot!
Whether this real estate foray is your first or tenth, if you’ve been considering taking advantage of this summer’s Midlothian home buying bargains, contact me today for an introduction to a qualified mortgage broker—and to discuss whether this might not just be the perfect time to start your search!