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2015-01-06 08:20:01
Housing 2015: Year of the first-time home buyer

2015 in Austin Real Estate

The potential return of the first-time home buyer

First-time home buyers here in Austin have had a rough couple of years now. Investors and the influx of people from other states with big pockets have taken its toll. Don’t worry, there may be some light at the end of the tunnel.

Here are four housing market trends industry experts (including myself) expect to see in the year ahead.

1. Looser lending standards

In early December, Fannie Mae and Freddie Mac put new lending guidelines in place and started offering 3% down payment mortgages that will make it easier for more first-time buyers to qualify for a mortgage.

Add to that a strengthening job market, and prospects look much brighter for young home buyers.

2. There should be more homes to choose from

Builders are ramping up production of smaller homes to accommodate these new entry-level buyers.

Re-sale starter homes here in Austin, that have been hard to come by, should see and increase due to investors being pushed out due to rising prices. Hopefully, it will allow the first-time buyer to compete as it was difficult to do in 2014.

3. Home prices may become more affordable

With so many new homes slated to come onto the market, the supply is expected to loosen up and that should take some pressure off of home prices. Good ole’ fashion supply and demand at work.

As I mentioned earlier, if there are fewer investors buying up properties it will slow the propping up of prices.

4. Mortgage rates will move higher -- at some point

If there's any single market trend that real estate industry pros have gotten consistently wrong lately, it's the direction of mortgage rates. But most do expect rates to rise at some point in 2015.

In December, the Federal Reserve signaled that it would not raise the Federal Funds rate until the summer of 2015 or perhaps even later. However, we’ve all seen that change at the drop of a hat (i.e. the unexpected 1% jump in rates from June to July 2013).

Mortgage experts expect mortgage rates may peak next year between 4.5% -4.75% for a 30-year fixed rate mortgage. They don’t see rates rising much beyond 5%, which would still be very favorable rate (historically speaking).

What does all this mortgage stuff mean to a first-time home buyer? Why cost yourself any more money than you have to? Get in at today’s lower rates rather than pay any higher at all. You’ll own your first home at a better rate than your parents did.

Get started, call the Big Man,

Robert T. Evans aka. the Big Man
BigMan@bigmaninrealestate.com

Cell: (512) 417-9785

 
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