Late Summer Housing Trends

This entry was posted in Market Updates on August 19, 2014

In June, we posted five market insights for summer. Now that summer is waning, how does the housing market look now? Let’s take a look.

Loan Rates

If you’ve been preparing to buy a home, but haven’t made the leap quite yet, good news – interest rates remain competitive locally. Some observers had predicted that mortgage rates would rise by this time in 2014, but any additional spikes in the late summer or early fall are unlikely.

The Mortgage Bankers Association’s latest forecast says the 30-year fixed rate could average 4.9 percent by the third quarter and reach 5 percent by the end of 2014.

However, if you’ve shopped around and found a rate that you like, now is the time to take the initiative to move the process forward.

Slightly More Flexibility with FHA Loans

Federal Housing Administration (FHA) loans allow homebuyers with small down payments to access credit. Historically, the cost of mortgage insurance has been on the rise, adding an additional burden on borrowers.

Earlier this summer, the government released a strategy to ease some of that burden if the buyer is willing to go through housing counseling as part of the process. This counseling is aimed at improving buyers’ budgeting skills and housing decisions.

The new FHA program is called HAWK, which stands for Homeowners Armed With Knowledge. The program reduces the upfront fee the FHA charges borrowers to 1.25 percent of the payday loan amount, from 1.75 percent. It also reduces the annual mortgage insurance premium to 1.25 percent from 1.35 percent.

The estimated start date for the pilot program is October 2014.

To be eligible, a borrower must be a first-time homebuyer who also qualifies for FHA-mortgage insurance. FHA defines a first-time homebuyer as an individual who has not been an owner in a primary residence for at least three years leading up to the purchase.

For more information about finding competitive loan rates, the FHA’s new HAWK program, or current trends in the Central PA market contact Bowen Agency Realtors today! We look forward to serving you.