More than 60% of US renters say they would buy a home if their lease expired this month. But is March 2023 a good time to buy a home?
We think it is.
Our latest Homebuyer.com When Should I Buy a Home video shows:
- First time home buyers are getting rebate due to increase in mortgage rates
- Home values didn’t drop and are starting to climb again
- Home sellers are meeting the demands of home buyers
This article reviews the March 2023 housing market for first time buyers and supports why now is a great time to buy your first home and get your mortgage pre-approved.
First time home buyers are protected from rising mortgage rates
Beginning March 2023, 30-year, fixed-rate conventional mortgage rates average 6.85 percent, according to Mortgage News Daily.
Four weeks ago, 30-year mortgage rates were below six percent.
The rapid run-up reminds us that rates are unpredictable. The down payment is nine percent monthly for a first-time buyer. It varies depending on how much house you can afford.
Thankfully, the government is getting in on it.
First-time buyers got a helping hand last month from a federal agency that aims to make home ownership affordable and attainable.
On February 23, 2023, the Federal Housing Administration announced plans to reduce annual mortgage insurance premiums (FHA MIP) by 0.30 percentage points, which would reduce FHA-backed homeowners’ monthly payments by $300 per year for every $100,000 borrowed Is.
This is the first FHA MIP cut in more than eight years and the third government intervention in the past ninety days to help first-time buyers.
In December 2022, the government introduced new rules that reduced mortgage rates to 1.75 percent for low- and middle-income home buyers. Then, in January 2023, it introduced rules that reduce interest rates on low-down payment mortgages.
Mortgage rates for the general homebuying public have been higher since the beginning of the year. However, overall rates are low for many first-time buyers.
Click to find out today’s mortgage rates.
home values are starting to climb again
The US housing market is not headed for a crash, and signs show that home prices are improving.
March 2023 begins with just 429,000 single-family homes for sale, according to real estate data company Altos Research, marking the tightest home inventory since last June.
The National Association of REALTORS® also reports low home inventory.
In its most recent Existing Home Sales report, the real estate trade group shows the national housing supply at 2.9 months, which means that at the current pace of home sales, every residential property for sale will be sold by the end of May.
When the domestic supply is less than six months, prices go up.
A new wave of buyers is also putting pressure on home prices.
Homebuyer.com data shows a 15.4 percent increase in first-time home buyer mortgage applications in February compared to the previous month, and search traffic for first-time home buyer queries such as “first-time home buyer program” and “what credit score?” Do you need to buy a house” are in equal measure.
Data points like these are the hallmark of healthy, growing markets.
Sellers Are “Throwing Money” At Buyers Right Now
The third reason March 2023 is a great time to buy a home is, to borrow a phrase from Axios, “Sellers are throwing money at buyers right now.”
A sample of real estate contracts shows that 42% of home sellers offered concessions to recent buyers, including money for home repairs, closing costs and purchase mortgage rates.
Another thirty-one percent reduced the selling price of their homes to make their homes more affordable to potential buyers.
Today’s home sellers behave as if they have lost their advantage over buyers. The data suggests that they have not.
- supply to homes
- demand for houses has increased
- Rising mortgage rates create urgency
The current housing climate represents a home buying opportunity. Buyers can make demands and sellers can fulfill those demands. Buyers will retain their market advantage and get homes at lower, affordable prices between now and mid-April.
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Conventional mortgage rate discount for first time buyers
In December 2022, the FHFA established an automatic mortgage rate discount for low- and moderate-income first-time home buyers.
Through its first-time home buyer mortgage rate discount, the parent agency of traditional mortgage backers Fannie Mae and Freddie Mac made your first home more attainable and affordable.
Rebate Program “Should I Rent or Buy a Home?”
The FHFA’s program applies to single-family homes, condos, townhomes and multi-unit properties. Qualified buyers receive a mortgage rate discount of up to 1.75 percent off their mortgage rate.
No additional documentation is required, and the exemption is automatic.
It’s also temporary – another reason why March 2023 is a good time to buy a home. After the completion of the FHFA mortgage rate discount program, interest rates increase.
Click here to submit a mortgage application.
how to buy a house with a small down payment
For many first-time home buyers, home ownership can’t wait.
Whether interest rates are high, housing is in short supply, or there is a need to save more money in the bank – it doesn’t matter.
The time to buy a home is now.
Thankfully, first-time buyers can achieve their American dream of homeownership without having to save 20 percent for a down payment.
Buyers can apply for low-down-payment and no-down-payment mortgages through local housing offices, online and offline mortgage lenders and through down payment assistance programs.
It’s getting easier to get mortgages approved with as little as 20 percent down.
Over the past 18 months, mortgage lenders have lowered minimum credit score requirements for FHA, USDA and VA mortgages. Congress also came forward to help.
Last year, it passed a law that changes how medical loans and credit scores work, raising FICO credit scores by an average of 22 points. Home buyers with high credit scores have access to lower mortgage rates and higher mortgage approval rates.
Congress is also discussing affordable housing bills for programs for first-time buyers, including home buyer tax credits, down payment assistance and cash grants and other purchase incentives.
This video reviews 14 first time home buyer programs.
buying a home in 2023
March 2023 is a good time to buy your first home. Our advice for today’s home buyers is threefold.
First, get a mortgage pre-approval.
Mortgage pre-approvals use today’s rates to tell you how much home you can afford and set realistic limits for your home search.
Every successful purchase starts with a good pre-approval. It’s never too early to get it.
Second, add points to your credit score.
Review your credit report for errors and supplement your monthly bill payments with a credit-building service like StellarFi that can last up to 30 days.
Third, use the HUD website to research payment assistance programs in your area. Some programs may have been discontinued or refunded in the new year, so call your local provider to confirm availability.
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