Highest Offer Not Always the Best

Are you postponing buying a home because you think you have to have a huge down payment in order to compete in your market? We have some good news: perception is not necessarily reality.

More than half of the real estate agents surveyed by Redfin said the typical down payment for successful buyers in their market was less than 20 percent. And, one in four said a down payment between 3 and 5 percent was typical among successful buyers. keep reading

Are you spending too much of your income on rent?

Many middle-income families—40 million to be exact—are spending more than a third of their income on housing costs. The general recommendation is to spend no more than 30 percent of your gross monthly income (before taxes) on rent, yet more than 21 million renters do so according to the State of the Nation’s Housing Report.

Middle-income renters are in a tight spot

According to the report, last year marked the largest single-year jump in new renter households, yet developers are primarily catering to the more affluent renters. Plus, rental rates have risen another 2 percent in the past year. These are just a few of the reasons why the national homeownership rate is down 5 percent since its peak of 69 percent in 2004.

On a positive note, the report showed income growth picking up, especially among young adults, which could help boost savings for a down payment and ability to afford a house.

Down payment programs could help

With interest rates still at historic lows, the biggest game changer for many would-be homebuyers will be finding a homeownership program that can help with down payment and closing costs or provide long-term tax credits.

In a recent Genworth Mortgage Insurance survey, 64 percent of mortgage lenders cited lack of a down payment as the top obstacle for today’s buyers. keep reading

Let’s move 5.5 million qualified buyers off the sidelines

First-time homebuyer sales are at historic lows, however data from the Harvard Joint Center for Housing Studies (JCHS) shows that in many metro markets more than 50 percent of 25-34 year-old renters have the income and credit scores to qualify for a mortgage today. These sidelined buyers are holding onto the belief that all home loans come with a hefty down payment and stringent qualifications. And, it’s keeping them from investigating their options. Could access to homeownership programs be the answer?

infographic.firstslidedataThere are nearly 2,200 such programs across the country and more than 91 percent are funded and available to eligible buyers. Homebuyer programs can be coupled with affordable FHA and VA loans as well, helping buyers save on their down payment and closing costs. Our Quarterly Homeownership Program Index highlights the diversity of programs available to meet the needs of all types of buyers.

How many renters could qualify?

Let’s take the JCHS data a step further to quantify how many renter households are qualified to buy a home today. According to the Census Bureau, there are 11.1 million renter householders between 25 and 34 years old. And, the JCHS found that on average 50 percent are qualified to buy a home today. keep reading