Skin in the Game

According to data from the California Association of Realtors, the housing market is weathering the economic downturn better than it did during the Great Recession, as buyers have more skin in the game.

Compared to those who bought their homes before the recession, buyers in recent years have made higher down payments, taken on fewer risky loans and second mortgages, and have higher household incomes. That means we can expect fewer defaults and foreclosures as the market continues to shift.

Chic vs. Geek: HomeReady Mortgage

Are you a first-time homebuyer without a lot of money for a down payment? Fannie Mae has a program that might work for you, but there are pros and cons...

CHIC (PEARL)

Fannie Mae’s HomeReady program can help you make a property pencil out with a low 3% down payment and additional flexibility to apply gifts, grants, and cash-on-hand to your down payment and closing costs. You also get the benefits of affordable and cancelable mortgage insurance — unlike FHA loans — and valuable homeownership education so you understand all of the factors at play. Check this quick start guide for more.

GEEK (KEVIN)

So what’s the downside? Well, you need a good credit score just to qualify for a HomeReady loan, and there are income restrictions that could leave you on that bubble of making too much to meet the limit but not enough to make the purchase work. And a lower down payment means additional financing and higher interest rates, which may not fit your monthly budget. Find out if you qualify using this simple map tool.

A good home is hard to find

You don’t have to take our word for it. Housing demand and short supply is making this a sellers’ market, and bidding wars are becoming more common. Think you’ve had a rough time? NPR has the story of a couple who bid on 40 homes — with nothing to show for it.

Number Talk: Reasons to Buy

COVID-19 may have us all stuck at home, but that’s not keeping potential buyers on the couch. In fact, a study from Lending Tree found that 53% of homebuyers are more likely to purchase a home the next year — precisely because of the coronavirus. Among the top motivations:

1. Taking advantage of record-low mortgage rates (67%).

2. Ability to save a larger down payment due to reduced spending (32%).

See more in the chart below.