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The rapid pace of sales, along with soaring prices and rates in today's housing market are making aspiring buyers stretch their budgets, and turn to a variety of financing options to gain entry.
Prosperity Home Mortgage consultant Mike Graff says that buyers are more confident and willing to stretch more than before, as the stock market rises and the economy improves. "I think that some people realize they're not going to be in a house for 30 years, so they're definitely more comfortable moving to an adjustable rate mortgage (ARM). We have seen an uptick in that." Banks, too, are willing to take on more risk, and in the jumbo loan sector held on their balance sheets, CNBC reports. For a home costing upwards of $500,000, buyers may now put down 5 percent, rather than the customary 20 percent.
At a Sunday open house on a sunny spring day outside Philadelphia, only about a half-dozen families showed up to tour a $600,000 colonial. The home was in a sought-after suburb with excellent schools and had just gone on the market the previous Thursday. The showing was lean, likely because more than two dozen potential buyers had already seen it immediately, and there were two offers pending. That scenario is playing out in neighborhoods across the nation, as buyer demand soars and the supply of homes for sale sits at a record low.
