At a time when low mortgage rates are making properties more affordable, a shortage of homes for sale is also creating challenges for homebuyers.
The average rate on a 30-year, fixed-rate mortgage was 2.87% for the week that ended Sept. 17, down from 3.73% a year earlier, according to Freddie Mac.
Tight inventories in the housing market have long been a focus of discussion, but the scope of the issue was brought into focus in March as Fannie Mae reported the U.S. housing market is undersupplied by 3.3 million units following years of underbuilding relative to population growth.
Because of the scarcity of homes for sale, especially at prices that are affordable for first-time buyers, it’s increasingly important to help members understand how being preapproved for a mortgage can make it more likely their purchase offer will be accepted.
In September, The Orange County Register reported that some home sellers are making preapprovals a condition for in-person home tours — as well as purchase offers.
In a June New York Times article, National Association of Realtors Chief Economist Lawrence Yun said, sellers “want to show homes by appointment only, and they want offers from serious buyers who have been preapproved for financing … They don’t want casual shoppers.”
In the same article, several real estate agents also said today’s homebuyers may also need to ignore issues, like minor repairs, that would have been subject to negotiation in a less heated housing market.
Unfortunately, the supply of homes is tightening. Housing inventory in the 50 largest U.S. metros declined by 34.8% year-over-year in July, according to Realtor.com. At the same time, some analysts were disappointed in August as single-family home starts increased by only 4.1% while the multi-family housing segment declined 22.7%, CNBC reported.
To help credit union loan originators prepare first-time homebuyers, in particular, for the mortgage process, Arch MI provides a complete toolkit you can use to help set expectations. Called The Roadmap to Homeownership, it includes an in-depth presentation you can use to explain the process, the benefits, and the financial implications of homeownership.
It’s relatively easy to share the RtHO presentation as a live webinar using apps like Google Slides, PowerPoint Online or Facebook Live to individuals or a group of members who can log on from various locations to see and hear your presentation using most smartphones, tablets or home computers.
RtHO makes it easy to co-brand the presentation and other resources with your credit union’s logos and contact information. The materials include worksheets and other resources to help members prepare for a home purchase and determine an ideal mortgage amount for their budget. With social distancing and self-imposed quarantines in force, homebuyers can use the time at home to review their options, complete the worksheets and emerge better prepared for the biggest financial decision of their lives.
Increasing members’ understanding of how to navigate the current seller’s market can help set realistic expectations and avoid disappointment as more sellers insist on buyers being preapproved.
As Chief Marketing Officer, Jim Jumpe oversees a long-term strategy to steward the Arch MI brand, help drive sales through effective customer communication, events, advertising and marketing collateral, and develop and execute innovative marketing strategies.