People have been asking a lot of questions the last few weeks about our local real estate market. Even though we have not seen a noticeable change in home prices or inventory, there has been some changes in the lending world.
The hardest hit loan type has been FHA loans. Borrowers who don’t fit neatly into Fannie Mae and Freddie Mac’s lending criteria could soon have fewer options if they want to buy a home. Many buyers in Maricopa use an FHA loan and some use a Down Payment Assistance Program (DPA). In the last couple of weeks we have seen a freeze on some (DPA) loans and then a reigniting, and then some changes on the criteria to qualify for FHA loans in general.
FHA loans are considered riskier loans, and they typically cost the borrower more money to obtain. Lenders are reconsidering the level of risk they want to take at this time, and therefore putting greater restrictions of qualifying factors.
Homes are still being listed and buyers are still being prequalified to buy. Consumer confidence plays a large role in any economic situation. Some people are of the mindset that the current economic situation we are experiencing will be over soon, and we will get back to business as usual.
Other people are experiencing job loss, fear and concern about their future. Until this shaking subsides and things fall back into place or we enter into a new normal, we really don’t know the full effect of what will happen economically.
Here are somethings we do know that should help us feel confident about the housing market.
- Interest rates are still low
- There have been 209 homes that have gone under contract since March 1 in Maricopa.
- There were 184 homes that closed in the month of March in Maricopa, compared to 178 in February 2020.
- There are 198 active listings in an HOA subdivision currently for sale. This is still considered a low inventory of homes available to buy.
If you are thinking about buying a home at this time for qualification purposes, the sooner you get started the better. Your Realtor can connect you to a lender that can begin to prepare you for a successful lending process. If your credit is lower or your debt-to-income ratio is high, with a few small changes you might be able to jump into a conventional loan category which could save you money in the long run. Knowledge is power, and if you give yourself time to work towards your home buying process, you will be successful.
As a community we have done a great job, I believe, supporting one another and staying strong. Let’s keep up the good work.