We’re continuing to see a slow and very steady recovery in the housing market, with a 2% climb in home buying through to the beginning of August.  It’s the current combination of low mortgage rates and much lower home prices – especially in the Detroit area – that’s fueling home sales.

First-Time Buyers Are Driving the Sales

According to the National Association of Realtors, existing home sales rose to 4.47 million units last month.  An existing home is classified as a home that has been previously occupied or otherwise used.  Compared to this time last year, home sales are up 10% and it’s first-time buyers that are creating that upward surge.

Currently, first-time buyers make up approximately 34$ of the overall home resale market.  One of the major causes for this is because mortgage rates have plummeted to all-time lows, averaging about 3.49% in July across the nation.  Given the fact that rental costs are rising, it’s easy to see why people are making the move.

At the current mortgage rates, a renter paying $1,500 per month in rent could get an equivalent mortgage payment on a line roughly equal to $330,000.  Obviously, a smaller and more affordable home would drop that monthly payment considerably.  With home in the Metro-Detroit area selling for under $80,000 in quality neighborhoods, renters took advantage by getting their first mortgage with a Michigan mortgage lender.

It also helps that there are programs to help first-tie buyers make that purchase with low-down payments.

For example, the FHA requires only 3.5% down on a new home and the USDA as well as the VA provide 100% financing to qualified applications.  Michigan even has a program for first-time buyers that can bring a down payment on a mortgage to as little as 1.5%.

Get the Process Started Today

Because mortgage rates can fluctuate, it’s best to make the move now.  Talk to a Michigan mortgage lender to find out if you can get pre-approved for a mortgage and where your finances stand.  With this information you can either move forward with buying a home in Metro-Detroit, or correcting any outstanding marks on your history that are preventing you from buying a home right now.

Legislation can also change quickly.  Given the state of the economy, it’s entirely possible for new legislation to arise that alters mortgage assistance programs.  In addition, your options for getting financing when buying a home can dry up.  With any kind of economic shift in a downward direction, most major banks tighten restrictions on credit and mortgages – especially to those with less than perfect credit.

A Michigan mortgage lender or private mortgage banker can do a lot more in working with first-time buyers, and do so in a more personable way.  The personal attention, particularly in helping first-time buyers navigate the buying process, is a priceless service.