with Terry Story, 25-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
2015 appears to be shaping up nicely for first-time home buyers – with a reduction in down-payment amounts to 3% and an easing on credit scores, maybe down to 620 – to encourage millennials to step into the market, hopefully without causing another mortgage loan crisis. The idea behind the relaxations in mortgage lending standards is to make homes affordable for households that actually want to live in them, raise families, develop neighborhood communities, etc., and make housing less of a commodity market for investors and home flippers who typically bring volatility and bubble-bust cycles to the housing market. The relaxed lending standards also aim to counter an uptick in home prices over the years and an impending increase in mortgage interest rates when interest rates start to rise again – in 2015 or perhaps later because weakness in the rest of the world could continue to place a lid on interest rates and potentially take mortgage rates even lower.
In addition, foreclosures are down, home price appreciation is down to the single digits and the housing market appears to be getting into a sustainable pace of growth – as the U.S. economy strengthens, consumer confidence rises and lower oil prices increase household cash.