If you have been following the news lately, you probably know a couple of things when it comes to the housing market. First, interest rates have been rising and may rise more in 2019. Secondly, housing inventory is low. Taking a quick look at this information can dampen hopes of becoming a first time homebuyer but, there is still hope.
Let us take a closer look at the market and why you should continue on your journey to homeownership. First, we will tackle those rising interest rates. It is true that interest rates are the highest they have been in 7 years. In addition, your affordability may be lower with a higher interest rate; however, there is good news. If we look at rates in the last couple of decades, we see that rates are still historically low. Rising interest rates also point to a strong and growing economy. 80% of homeowners in the US have equity they can tap into. Remember, owning a home builds generational wealth for a family. Once you own your home, you start building equity that you use can use later. This is something that you cannot do if you are a renter. There is more great news if you are planning to purchase your home in the City of Houston. The City of Houston Homebuyer Assistance Program has recently changed its guidelines for funds that will be distributed to home buyers this year as well as qualifying incomes. Eligible home buyers can now receive $30,000 in Down Payment Assistance. An eligible family must fall within an AMI (Area Median Income) of 80% or below to qualify. Previously this was a two-tier system, $25,000 for families at 70% AMI or below and $15,000 for those families between 70%-80% AMI. An increase in the amount of down payment assistance available to you can make a difference in the amount of house you can afford. In a recent article focusing on affordability, Houston ranked 2nd in fastest-growing metro areas by housing affordability in Q2. The article states “The Houston area’s affordability comes courtesy of having this list’s third-lowest house prices and sixth-highest household income.” If you want to lock in your interest rate for 2018 or have questions about down payment assistance, you can speak with one of Avenue’s Housing counselors.
In the past few years, housing inventory has declined creating a competitive landscape for potential home buyers. Homes were not on the market long before they were snatched up seemingly overnight. As interest rates start to climb, some homebuyers will bow out of the market. They may feel that it is too difficult to purchase a home or want to wait until there is more inventory to start looking. Taking advantage of the smaller number of buyers in the market may mean that you have the ability to choose from more homes. There has also been a slowdown in home prices. This gives wages and inventory a chance to catch up. In a recent article in The Houston Chronicle, houses listed in October, nationally, were 8% or $25,000.00 cheaper than homes already on the market. This is positive news for first time homebuyers, signaling the increase in more affordable homes. It certainly will not solve the problem overnight but for those potential homebuyers who have been searching it may provide some relief. Avenue is one source of affordable single family homes. Our newest development, Avenue Meadows, is located in the vibrant Northline community close to public transportation options and plenty of shopping. For additional information on these homes give us a call.
Houston and the surrounding areas continue to be on the top of housing affordability lists. If you dream of becoming a homeowner in Houston then your chances are still good. Do not let the rise in interest rates affect your dream of homeownership. Avenue's HomeOwnership Center is your partner in your journey towards sustainable homeownership.