Don’t Let Your Student Loans Delay Your Homeownership Plans
If you have student loans and want to buy a home, you might have questions about how your debt affects your plans. Do you have to wait until you’ve paid off those loans before you can buy your first home? Or is it possible you could still qualify for a home loan even with that debt? Here’s a look at the latest information so you have the answers you need. A Bankrate article explains: “Roughly 60 percent of U.S. adults who have held student loan debt have put off making important financial decisions due to that debt . . . For Gen Z and millennial borrowers alone, that number rises to 70 percent.” This includes one of the biggest financial decisions you’ll ever make, buying a home. But you should know, even with student loans, waiting to buy a home may not be necessary. While everyone’s situation is unique, your goal may be more within your reach than you realize. Here’s why. Can You Qualify for a Home Loan if You Have Student Loans? According to an annual report from the National Association of Realtors (NAR), 38% of first-time buyers had student loan debt and the typical amount was $30,000. That means other people in a similar situation were able to qualify for and buy a home even though they also had student loans. And you may be able to do the same, especially if you have a steady source of income. As an article from Bankrate says: “. . . you can have student loans and a mortgage at the same time. . . . If you have student loans and want a mortgage, there are multiple home loan programs you might qualify for . . .” The key takeaway is, for many people, homeownership is achievable even with student loans. You don’t have to figure this out on your own. The best way to make a decision about your goals and next steps is to talk to the professionals. A trusted lender can walk you through your options based on your situation, and share what’s worked for other buyers. Bottom Line Lots of other people with student loan debt are able to buy their own homes. Talk to a lender to go over your options and see how close you are to reaching your goal.
A Newly Built Home May Actually Be More Budget-Friendly
If you’re in the market to buy a home, there’s some exciting news for you. Many people assume that newly built homes are more expensive than existing ones (houses that have already been lived in), but that’s not always the case. In fact, exploring newly built homes can sometimes lead to more cost-effective options, especially today. Hard to believe, right? But the data doesn’t lie. Here are two key reasons working with your agent to look into new home construction could help you find a more budget-friendly option. Reason 1: Lower Median Prices for Newly Built Homes The median sales price for newly built homes is lower than the median sales price for existing homes today. This might seem surprising, but it’s true according to the latest data from the Census and the National Association of Realtors (NAR): Why is that? Builders are focused on building what they can sell. And right now, there’s a very real need for smaller and more affordable homes – so that’s what they’ve been bringing to the market. At the same time, there are also more newly built homes already on the market than there have been over the past few years, so builders are motivated to make sure they’re selling what they’ve got available before adding more. Reason 2: Attractive Incentives from Home Builders Another big reason to consider a newly built home is the range of incentives that many home builders are offering. Again, since builders are aiming to sell their current inventory, some are providing special deals to sweeten the pot for homebuyers. HousingWire explains today’s trend: “Overall, the usage of sales incentives was up to 61% in June, compared to 59% in May.” One of the most appealing incentives right now is how builders are able to offer competitive mortgage rates. They may also provide other incentives, such as covering closing costs, or offering free upgrades. Why This Matters to You Considering a newly built home could open up opportunities you hadn’t thought of before. With competitive pricing and attractive incentives, you might just find that a brand-new home is the most appealing option for you. Bottom Line Buying a home is a big decision, and it’s essential to consider all your options. By looking into newly built homes, you might find a perfect fit for your needs and your budget. Let’s explore the possibilities together. If you have any questions or want to see what’s available, feel free to reach out.
Falling Mortgage Rates Are Bringing Buyers Back
If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign it may be time to talk with an agent.After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors. And yesterday the Federal Reserve cut the Federal Funds Rate for the first time since they began raising that rate in March 2022. And while they don’t control mortgage rates, this sets the stage for mortgage rates to fall even further than they already have – especially since more cuts from the Fed are expected into next year. And lower mortgage rates are bringing more buyers back into the market. Lisa Sturtevant, Chief Economist at Bright MLS, says:“A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.”The best part? You can take advantage of that renewed buyer interest.As Rates Fall, Buyer Activity Goes UpThe graph below illustrates the relationship between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate, while the blue line shows the Mortgage Bankers Association (MBA) Mortgage Application Index, which tracks the number of mortgage applications.As you can see, as mortgage rates (orange) come down, the Mortgage Application Index (blue) rises, showing more people start to re-engage in the process (see graph below):What This Means for YouAccording to the National Association of Realtors (NAR), home sales increased in July, which was a welcome shift after four straight months of declines. If you're a homeowner thinking about selling, this uptick in buyer activity works in your favor.More buyers means more competition, which can lead to higher offers and shorter time on the market for your house. And, according to Edward Seiler, AVP of Housing Economics at the Mortgage Bankers Association (MBA), this trend is expected to continue:“MBA is expecting that slower home-price appreciation, coupled with lower rates, will ease affordability constraints and lead to increased activity in the housing market.”All in all, the market is becoming more accessible to a wider range of buyers, which could result in even more people looking to purchase a house like yours.With more buyers entering the market, now’s the time to start getting your house ready to sell.Bottom LineThe recent decline in mortgage rates is already driving more buyers into the market, and experts project this trend will continue. Work with a local real estate agent to take advantage of this increased buyer demand and get your house ready to sell.
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