First-time homebuyers have been able to take advantage of low home prices and interest rates that, in some cases, may be below 5% on a new mortgage, which has many advisers of the mind that now is a good market for anyone looking to purchase a new home, but many homebuyers have reportedly been hesitant to enter the housing market and, as a result, fears that challenges which may arise as a result of current housing market conditions or new financial practices could make purchasing a new home more troubling or costly than it would seem.
The arguments that first-time homebuyers are in a good position to take advantage of a new home obviously center around low home prices, affordable interest rates, and the fact that there are numerous homes in the housing market as a result of foreclosure, which could result to more sellers being willing to work with homeowners to meet them at an affordable price. Yet, a recent report on MarketWatch.com stated that, “Seventy-seven percent of potential buyers said that ‘uncertainty about selling an existing home’ was the reason they were holding off.” While there were reportedly some homeowners who felt that they could not get a fair price for a home, there seems to be more worry and hesitation related to the ability of these individuals to sell their home at a profit later, as decreases in property values continue.
While some homeowners have been able to refinance and take advantage of low mortgage interest rates and find more affordability in their monthly mortgage payments, there is still hesitation on the part of new homebuyers mainly due to the state of the housing market which, again, has seen property values decline over the past months. Many argue, though, that there are also other factors that could be keeping some homeowners from entering the housing market, as more lenders are requiring homeowners put a higher percentage towards the down payment of their new home.
When the first-time homebuyer tax credit was offered last year, the housing market saw an increase in the number of homeowners entering into new properties, as the overall costs which were associated with purchasing a new home were reduced. Yet, closing costs which now may be higher, thanks to requirements for a higher down payment, could also be one factor keeping homeowners away from purchasing a new property, despite the fact that there are, again, plenty of homes sitting empty thanks to foreclosure and other troubles that homeowners have faced.
However, there are still advisers of the mind that homeowners who may be hesitant about purchasing a new home may want to reconsider their position as, again, finding an affordable home at a low interest rate is something that has been accomplished for many, despite the fact that there are still factors that must be considered. Arguments that mortgages will become more difficult to acquire and more expensive have led many to heavily consider purchasing a home at the present time, but there are still worries that homeowners may buy a home and find themselves in an underwater predicament as some areas of the nation are still seeing declines.
Yet, even homeowners who may decide to purchase a new home are not guaranteed to qualify for a mortgage, as again, higher prices for down payments are being required and many lenders may ask that homebuyers be in a much better financial position, in terms of their job stability and credit score, than in months passed before they may qualify for a mortgage or a low interest rate on their home loan.