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December 12, 2014
At First Option, we believe each person who walks into our branches deserves to know everything about the mortgage process before they start it. “An educated consumer is the best client,” said the New York clothing store Syms. We agree, which is why we often use this blog to relay the latest industry news.

Mortgage rules and real estate trends change every week. It’s hard to know every trend, which is why we’ve launched this roundup. Each Friday, we’ll offer a collection of the biggest, most pertinent news for homebuyers, sellers, and anyone who’s about to enter the fray—telling you what’s going on, and why it matters.

Assembled for you every week, here are the top 4 mortgage-related industry stories for December 12, 2014.

image by Svein Halvor Halvorsen

U.S. Lowers One Hurdle to Obtaining a Mortgage

What it’s about: This week, the Federal Housing Finance Agency released details about new requirements for Fannie Mae and Freddie Mac mortgages. Among them are programs for first-time homebuyers and other qualified borrowers, allowing them to secure a mortgage with just a 3% down payment—as long as they meet certain credit and income requirements. The plan is part of an effort to increase the number of first-time homebuyers, who currently represent 29% of the market, substantially below the 40% historic average.

What it means: More people have access to homeownership. That’s the most important takeaway from this change. In the past, down payment requirements were all that barred many people from buying a home. They had great credit and good, steady incomes, but they couldn’t scrounge together the tens of thousands of dollars they needed as a minimum down payment. Now, buying that first starter home will be a lot easier. 3% is much more manageable than 20%, or even 5%. If you don’t have this amount saved already, it’s an attainable goal.

Related Resource: The Perfect Holiday Gift? A Mortgage Down Payment

 

Why Atlanta’s Housing Market Is Outpacing the U.S. As a Whole

What it’s about: Home prices in the Atlanta metropolitan area increased 11.5% in year-over-year figures this June—nearly twice the 6% growth of the U.S. as a whole. This is due to a number of factors. Demand for Atlanta housing outpaces supply; the city’s population, particularly in Downtown, Midtown, and Buckhead neighborhoods has grown, up 6% from 2010 to 2013; and many developments have cropped up as a result of both changes.

What it means: If you’re a homeowner in Atlanta, you’re in a good position to sell. Demand is up, so buyer competition is too. If you’re not ready to relocate, though, you’re also in a good position to stay put and watch your home appreciate. More and more corporations are moving to Atlanta every year, seeing the city as a key hub for base operations. That’s keeping the economy strong and the population growing, both of which entail even higher home prices in the future.

Related Resource: Here’s More Good News for the Atlanta Housing Market

 

 

Millennials Will Be Biggest Home-Buying Bloc by End of 2015

What it’s about: Sellers, get ready. Zillow predicts that the wave of the housing market future will be composed—primarily—of young people, millennials to be exact. The company’s chief economist cited a new survey which found that 42% of millennials want to buy a home in the next few years; and only 31% of Generation X, who dominated the market, said the same. As proof, he pointed to various trends and predictions about the economy, mortgage rules, and rental prices, believing these will encourage more people under the age of 35 to become homeowners in 2015.

What it means: Demand is going to go up throughout the nation, but sellers need to be aware of buyer wants and expectations. Millennials desire features in homes, like tech-readiness and walkability, that many previous generations have ignored. If you’re planning to sell in the coming years, you need to be prepared to market your property toward this new key demographic. And if you’re young and hoping to buy your first home, you’re in luck and good company. 2015 may very well be the year that young people shed the bonds of student debt and lower incomes and purchase their first home.

Related Resource: 5 Myths about Millennial Homebuying

 

 

U.S. Mortgage Rates Hit 19-Month Low

What it’s about: Mortgage rates hit another low last week, the lowest point in over a year. 30-year fixed rates averaged just 3.89% last week, down from 3.97% the week before, and much lower than 4.46% the same time a year ago. Mortgage rates have been low all year, at least compared to historical figures, but these recent trends harken back to the beginning of 2013, when rates hovered around 3%.

What it means: If you’ve been on the fence about refinancing, you need to jump off, now. No one knows where rates will be in a week or even another day, but we do know these current figures are the lowest they’ve been in almost two years, and you should take advantage of that. The last time rates were this low, the economy and most housing markets weren’t great, but the recovery has had a powerful effect over the last 19 months, and more people are financially able to apply for a mortgage or refinance now. According to the latest figures in mortgage applications, more people are doing just that.

Related Resource: U.S. Mortgage Applications Reversed Course and Jumped 7.3% Last Week

 

Whatever market you’re in, we’d love to help you buy or refinance a home, or just talk to you about mortgage rates. To talk to one of our talented professionals about these and other trends, contact us today!

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