Mortgage Application Payments Decreased 2.4 Percent to $2,167 in June
There’s a lot changing in real estate right now which has led to a dynamic market. In recent months, homebuyer affordability saw a notable improvement. The national median mortgage payment fell to $2,167 from $2,219, making home purchases more accessible. This change is primarily due to a decrease in mortgage rates, which has increased purchasing power and encouraged more people to buy homes. Additionally, the median loan amount decreased to $320,512, suggesting that the rate of home price increases is gradually slowing down. It can be an ideal time to explore the housing market and find more affordable options. If you’re interested in navigating this improved market and finding the best opportunities for your needs, contact me for advice and support to help you make the most of these favorable conditions.1
Some Renters May Be ‘Mortgage-Ready’ and Not Know It
With 44.1 million American households renting, many renters might be surprised to learn that they could afford a home purchase. However, a large percentage of them may not have the right information to help them make the leap. With rising rental prices, here are some steps current renters should take to explore buying options:
- Understanding one’s financial situation is crucial. Start by checking your credit score, as this influences loan approval and interest rates.
- Evaluate the debt-to-income ratio to ensure stable management of adding a mortgage payment alongside existing debts.
- Consulting with a loan officer can provide valuable insights and help you determine if a loan program can support your financial situation.
The third bullet point might be the most important because as a loan officer myself, I can confirm that my goal is to help any prospective buyers along the journey understand their options and create a strategic plan no matter how long it takes.2
Did You Know?
Buyer offer letters, intended to sway sellers with personal stories and emotional appeals, are discouraged by real estate experts and the National Association of Realtors (NAR) due to potential violations of the Fair Housing Act, as they may reveal protected class information and lead to housing discrimination.3
The Rise of Rentvesting: The New American Dream
The American dream of homeownership is evolving with a rising trend called “rentvesting.” Did you know that in 2024, 34% of Americans rented out their homes? Many people are choosing to rent in pricey cities while buying investment properties in more affordable areas. This strategy allows them to own property and build equity without sacrificing their desired lifestyle. For example, a couple in Ohio bought an investment property in a growing suburb, while others in California purchased vacation rentals in affordable destinations. With high home prices and mortgage rates, rentvesting offers a practical way to enter the real estate market and generate rental income. If you plan to go down this road, keep in mind that you will need to follow investment property guidelines. If you’re interested in exploring how rentvesting could work for you, I’m happy to discuss with you.4
Market Is Shifting Slowly in Buyers’ Favor
Despite the recent headlines about soaring home prices, the housing market is beginning to shift in favor of buyers. In recent months, existing home sales declined by 5.4% compared to last year, despite home prices reaching new record highs. The median price for existing homes climbed to $426,900, marking the second consecutive month of record prices. Despite the rising median price, NAR Chief Economist Lawrence Yun shared, “Supply and demand dynamics are nearing a balanced market condition. The month’s supply of inventory reached its highest level in more than four years.” Inventory of unsold homes also increased by 3.1% from the previous month and is up about 23% from a year ago. This rise in inventory means more choices for buyers and less competition. Homes are staying on the market longer, which could signal a shift towards a more balanced market. For those considering buying, this could be an opportune moment to explore new options.5
Sources: 1 mba.org; 2 cnbc.com; 3 realtor.com; 4 businessinsider.com; 5 nar.realtor
