Is the housing market really set for a recovery? There is at least some reason for optimism.
Existing home sales dropped in January to the lowest level in a year and a half, but the ongoing shortage of houses on the market continues to increase prices in much of the U. S., reports the National Association of Realtors.
According to the report, total existing home sales dropped 5.1% on both a monthly and yearly basis. Severe weather likely played a role, along with tight credit, limited inventory, and higher interest rates. These issues will deter home sales until employment and economic growth improve.
On the other hand, home buyers may have less competition and an easier time finding their dream home this year, according to the Zillow Home Price Expectations Survey. Cash rich real estate investors—individuals and companies who bought up lower-priced and foreclosed homes during the recovery—squeezed out many would-be buyers. But they are expected to make fewer purchases in 2014 as a result of rising prices. This will mean more homes for sale, and those competing for them will be more alike in their budgets. Most buyers will bring only a part of the purchase price to the mortgage transaction, which may keep home prices within a narrower range.
If now is the time for you to purchase a home, how will you get started? The Consumer Financial Protection Bureau webpage on mortgages provides helpful hints, checklists, and links to other sources of information such as credit reports, and insurance. The Federal Housing Administration website offers helpful guidance on various aspects of obtaining a home loan, including their FHA loan requirements. A visitor to the FHA site can also access and use Mortgage Calcualtors and find information about avoinding foreclosure.
Naperville Public Library has an abundance of books on home buying. And on April 10, during Money Smart Week, the Library will be sponsoring “The ABC’s of Buying a Home,” a free workshop that provides an excellent overview of the home buying process.