Home prices are up, which makes homeowners happy but also makes them worry that another housing bubble is forming. We’re happy to confirm that we are definitely not entering a housing bubble—a fact supported by many American economists, including Mark Dotzour, Chief Economist at Texas A&M University, who says: “We are not in a housing bubble. We are in a situation where demand for houses is much higher than supply.” While home prices are continuing to rise, they are still balancing out the extremes of the peak and the correction from the housing bubble. Home prices are expected to continue to rise into 2016 and even 5 years beyond. No housing bubble means this is a great time to buy, now, as prices continue to rise!
Many homeowners underestimate the equity they have in their home. Almost half of homeowners who have 20% or more equity in their homes believe they have less. Are you waiting to step up to a bigger home because you don’t think you have enough equity? Considering these statistics, you may be way off. Take a moment to call Heidi. She can do an MAA (Market Absorption Analysis) to give you an idea of what your home may be worth. You may be familiar with the CMA, the Comparative Market Analysis that most Realtors complete when figuring out the value of your home. Heidi’s approach provides a much more accurate number because it considers variables beyond what the CMA considers, including the state of your home versus the homes it’s being compared to. When considering information from the MAA and your mortgage statement, you may learn that the equity you have in your home is much more than you expected, giving you the green light to starting thinking about an upgrade!
How big of a role do FICO scores have in financing? It’s not just first-time home buyers who overestimate the FICO score they need to have in order to qualify for a mortgage. Many current homeowners delay making the step up to a bigger home because they believe they won’t qualify for their mortgage due to low FICO scores. However, statistics show that while most first-time buyers think they need a 780 FICO score to qualify for a mortgage, the current median FICO score for approved mortgages is just 709. Don’t let your FICO score keep you from your dream home!
What does the news from September tell us about planning for housing changes this fall? Don’t make assumptions! Before deciding that there’s a new housing bubble, that you don’t have enough equity in your home, or that your FICO score is too low, talk to your Mittelstaedt Team experts. We’re keeping up on the market and can be sure you have the information you need to make wise decisions.