compelling dilemma, but one that leaves out several other crucial components to
the homebuying process, which all, in the present marketplace, point to buying
a residence sooner rather than later. Here are three things your clients should
1. Prices on All Levels are Increasing – The most obvious reason to buy now rather than
later is that homes are becoming more expensive; though prices are still down
26 percent from their 2006 peak, they increased more than 8
percent year-over-year in December according to CoreLogic, and seem to be showing no sign of
slowing down. And to top it off, rental prices are increasing as well, with
both Zillow and Trulia’s recent report showing rents rising more than 4
percent in 2012.
2. Prices are Not the Only Thing Rising – The phrase “historically low mortgage rates” became
somewhat of a meme in 2012, and we’ll admit, we were almost getting sick of
reporting it every Thursday! But starting a couple weeks back, mortgage rates began to increase, and the Mortgage Bankers Association is predicting rates will hit 4.4 percent in 2013.
3. Mortgage Regulations Will Also Change – The way that consumers qualify for a residential
mortgage is also expected to change in 2013. Though the Consumer Financial
Protection Bureau’s announced Qualified Mortgage rule all but solidified the post-boom lending standards that many of us
had grown accustomed to, the upcoming QRM, or qualified residential mortgage,
rule is still expected in 2013, and it could influence the minimum down payment
and FICO score for mortgages; and to top it off, the FHA is preparing to clamp down on it’s mortgage standards as well.
FHA changes, said Steve Lawrence, the managing broker for Baird & Warner in
Libertyville, should inspire action from homebuyers.
key thing is, with the FHA changes, the buyer cannot lose the PMI for life of
loan,” Lawrence said, alluding to the new FHA policy that borrowers will pay
insurance premiums through the life of the loan, rather than the previous 87
percent of the loan.