In recent months, there has been an uptick in the number of consumers interested in homeownership. Record low mortgage rates and small gains in the labor market may be contributing to greater consumer confidence, and as optimism rises, more potential buyers may start taking their home searches more seriously.
The number of Americans who were previously disinterested in owning property has declined sharply, according to a recent FindLaw.com survey. In 2010, 63 percent of Americans said the state of the economy was a barrier to homeownership. Today, however, the number of respondents who gave the same answer stood at 30 percent. In addition, the number of people who say current economic conditions – including competitive mortgage rates and low housing prices – are more likely to make them want to purchase a house increased to 11 percent, from 8 percent in 2010.
“Two years ago, the economic situation was driving a lot of potential homebuyers to the sidelines,” said Stephanie Rahlfs, an attorney and editor with FindLaw.com. “But today we’re finding that the state of the economy is becoming less of a factor in keeping people out of the housing market.”
Getting prepared to purchase a home
Many factors influence housing decisions, including income, housing prices, proximity to work, job relocation, mortgage rates, ability to sell an existing home, schools, and so on. But it’s clear that people’s outlook on the economy is now becoming less of a drag on the housing market.
It’s important that consumers develop and stick to a money management plan that enables them to save enough for a large down payment. Individuals should strive for a down payment of 20 percent, which will exempt them from being required to purchase private mortgage insurance. In addition, the larger the payment consumers make, the lower their monthly mortgage payments will be over the term of the loan.
Prior to taking the dive into seeking a mortgage, it’s also important that consumers organize their finances and ensure their credit is in good standing to qualify for low rates. Most credit counselors urge buyers to pull their credit reports up to nine months in advance of submitting a mortgage application. This gives potential borrowers enough time to assess their credit standing and make positive changes that may improve their credit reports and scores. This also gives buyers sufficient time to dispute inaccurate information.