Mortgage rates still low, but home affordability has declined for many

Mortgage rates are still low, but they are gradually rising

The median home price in Southwest Louisiana has increased, but it is still low when compared to the national median list price, and government incentives may be available to assist first-time homeowners.

For a long time, mortgage rates have been historically low.
Some 15-year rates have been as low as 2%, while 30-year rates have been higher.

“Rates will vary depending on the program, down payment, credit score, amount of years, and discount points earned,” Jennifer Spees of Louisiana Mortgage Associates explained.

“Depending on the period and type of loan, someone with good credit and no discount points may see a rate of 2.5 percent to 3.5 percent.”

Since the beginning of the year, rates have climbed.
According to Spees, the percentage ranges from 5% to.75 percent.

It’s likely that the Fed will feel comfortable hiking the federal funds rate, which determines the prime rate and variable mortgage rates, if employment improves and inflation stabilizes.

For many potential purchasers in the United States, house affordability fell in the third quarter – and for the entire year of 2021.

The national median household income was $303,288, up 17.7% from the previous year and up 45.6 percent from 2017.

The good news is that, despite high demand and low supplies, Southwest Louisiana is not experiencing these significant price rises.

Demand for housing has risen across the United States.
Because of the pandemic, more people began working from home.
Changes to the space and floor plan are required.

For the first time, certain professionals may live anywhere, have the perfect house address, and/or reside in a rural town where real estate is more inexpensive regardless of commuting times.

COVID had an effect on material availability as well.
The need for building supplies and labor in Southwest Louisiana was exacerbated by hurricane damage to dwellings.

The median home price in Calcasieu Parish is $180,065, up 1.4 percent from last year.

According to the most recent Porch survey, the parish’s median household income is $51,246.

Porch is a website that connects homeowners with contractors who work in the home renovation industry.
Porch used Zillow parish/county data and Census Bureau data to find the least costly places to live in the United States.

Only parishes and counties with a population of at least 200,000 people were considered.
The United States’ median household income is $65, 712.

The median property price in Southwest Louisiana was $235, 000, up 3.1 percent from $242, 500 the previous year, according to the Southwest Louisiana Association of Realtors.

According to Tonya Meche, 2021 President-Elect, Board of Directors, Southwest Louisiana Association of Realtors, the median sales price in 2018 was $213,200.
Lake Charles, Sulphur, Iowa, Westlake, and Ragley are among the cities and towns represented by the Southwest Louisiana Association of Realtors.

“A house that is priced correctly sells quickly,” said Amanda Cox, SRES, RENE, CRS, APR of Latter Blum.

Because of the high demand and tight availability – new houses are taking a long time to be developed here – she believes some existing property sellers have set unreasonable expectations.

“While a handful of my ads received numerous bids, sellers receiving an offer beyond the advertised price is not the usual,” she explained, “at least not locally.”

Comps (a list of similar homes in the neighborhood and what they sold for) and appraisals are still the most important criteria in determining how much a property is worth.
The slowing of appraisals is caused by a shortage of appraisers as a result of relocation due to hurricanes and other natural occurrences.

“Even if demand is stronger, assessment is mostly determined by the home’s worth,” Cox explained.

The mortgage interest rate is determined by the appraisal, as well as the applicant’s credit score and other variables.

Cox stated, “I am urging buyers to make decisions.”
“I’m encouraging hesitant sellers to put their home on the market now, while buying power remains strong thanks to low interest rates.”
Interest rates have a significant impact on this power.”

When today’s cheap loan rates are combined with new government programs, first-time home buyers may be able to realize their dream of owning a home.
Qualified applicants will be able to receive $25,000 in cash or a grant to help them buy a new house under the Downpayment Toward Equity Act.

The First-Time Homeowner Act has been approved, and it offers a tax credit of ten percent of the home’s purchase price, up to $15,000.

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