The government backed loan products are seeing rates nearly a full percentage point lower than Conventional loans in the current market. This bodes well for first time home buyers that have been priced out of local market when rates were at or above 7%.
We should see PITI payments in the $3000 range on a median priced home here in Vancouver. FHA will allow up to a 50% debt to income with strong credit profiles. That means the local median household income can afford the median priced home for the first time since 2021.
I have been harping on the fact that we just went through the most affordable housing market in US history. In fact rates were at or under 5% for more than a decade from about 2009 till 2021. This spoiled a lot of buyers into thinking that was the norm when in fact it was highly irregular. Now with rates settling down to about the 50 year average, we should see an opportunity for buyers once again to get into the market.
Incomes are not rising like they were a few years ago, but prices have also flattened out a bit as well. I have said all throughout this recent period that rates around 6% are healthy and we are now right there at least on the government backed loans like FHA and VA.
Some people that bought a home a year or two ago may be in a position to refinance into a lower payment, but be careful and make sure you understand the costs involved in that process. Sometimes it is a good deal and sometimes it is not. A trusted professional loan officer with your best interests at heart is critical when considering a refi.
So buyers let's get out and start looking and homes and sellers, you may be able to get that next house after all.
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