Buying a home has an ever-evolving list of variables to consider. Rates influence what people can afford to buy right now. Ninety percent of purchasers can’t afford half of the homes on the market, and just 13% can afford the homes that the other half of the 90% can’t. This indicates that the affordability index, sometimes known as “can you buy it or can you not buy it” in the industry, is in bad shape. Prices are still rising, even with a downturn in the housing market, based on real estate interest rates and how those interest rates affect purchasers and their intent to buy.

We are still in an increasing equity market, meaning that existing homeowners owe the same amount on their mortgage, but their equity is growing. This is extraordinary, with 35 to 45 percent of that equity being received in the last three to five years.

New home sales and starts are down, and big builders have been waiting to see if inflation will dominate the economy as the Fed raises short-term interest rates. Although the rate recently increased by 25 basis points rather than the anticipated 50, how will it influence the market, sellers, and the ability of purchasers to afford a house based on their current income if the Fed continues to raise interest rates, especially when that affects other areas as well?

What about situations that could adversely impact credit, such as a medical emergency, a death in the family, or a sudden loss of income? A trusted specialist can help to find a program that will offer some mortgage relief, including those by Fannie Mae and Freddie Mac, to provide options for extending the term of the loan and doing some debt forgiveness to help people retain their homes during difficult times. Mortgage professionals are the best source of information to help those in all stages of the home-buying process make the best decisions possible based on the specific circumstances of each individual. This week, Jeff’s guests include:

– Charles Giscombe (Malibu Funding Las Vegas) discusses increasing affordability for buyers.

– Kim Tran (AM West Funding) explains what is needed to use EZ Docs.

– Tomas Trujillo (FlexPoint Mortgage) shares financing options, including down payment assistance.