Bring on the Buyers

Written by: Michelle Nelson

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With mortgage rates at a 20 month low and Austin rent prices projected to rise by 4.5% this year, the 2015 market looks promising for buyers ready to enter the market.

With mortgage rates at a 20 month low and Austin rent prices projected to rise by 4.5% this year, the 2015 market looks promising for buyers ready to enter the market.

KVUE reported the average rent in Austin this year will hit $1,185. The “City of Austin staff consider "affordable" housing to be 30 percent of a person's monthly income. That means a person would need to make $3,950 a month or $47,400 a year if their rent is $1,185 a month.” Considering those figures along with current mortgage rates, homeownership becomes an affordable housing option for many consumers. The additional tax and equity benefits of ownership will also attract to buyers.

For consumers still in the rental market finding that perfect space will remain a challenge. Even with inventory expected to increase by 10,670 new units, occupancy is still at near capacity. Statistics released by Berkadia, a brokerage and financing firm, stated “renters quickly absorbed 9,150 of the 9,340 new apartments that were delivered in 2014. The overall vacancy rate stands at 4.5 percent, the lowest since 2006.” Predictions show these numbers are not likely to change for 2015.

Zillow mortgage posted a rate of 3.58% on a 30 year fixed loan Tuesday afternoon, marking a 20 month low. Low rates coupled with high occupancy and rising rent costs should have agents targeting move-up ready renters this quarter.

CFPB regulations will be getting their first test runs in August, so lenders may tighten up in response to the new regulations. The process of closing consumer driven loans will substantially change andthe time frames will lengthen. So, buyers looking for financing should start shopping today.

As agents begin to share their market expertise with potential buyers, the current market conditions and forthcoming changes in lending should give the buyer that extra incentive to choose home ownership now.

Sources:

http://www.bizjournals.com/austin/blog/real-estate/2015/01/hold-onto-your-wallet-rental-rates-may-climb.html?page=all

http://www.kvue.com/story/news/local/2015/01/15/austin-rent-expected-to-jump-45-percent-in-2015/21832787/http://www.zillow.com/mortgage-rates/

http://www.zillow.com/mortgage-rates/