Is Now A Good Time To Buy A Home in Williamsport?

If you've been considering buying a home in Williamsport, you may wonder whether now is a good time. Here are some answers to common questions to help you make an informed decision.  
 

When will the time be right for me to buy a house? 

The situation you're in will determine the best response to this query. Some analysts, however, argue that the current period of historically low loan rates and a relatively stable property market makes it an excellent time to purchase a home. Moreover, many people have utilized the pandemic to their advantage, saving money and enhancing their credit ratings to the point where they can now better obtain a mortgage. 

Shane Whitteker is the owner and chief mortgage broker at Williamsport mortgage broker Principal Home Mortgage. He believes that the market makes it almost always a good time to buy a home.

“In my opinion there typically is not a bad time to buy a home in general.  There are exceptions to this concept which largely depends on your location,” Whitteker says. “Pennsylvania usually doesn’t see to much drastic up and down movement in home values. We also tend to see values recover relatively quickly if we see a decrease.”   


What happened to home buyers the last time interest rates were high?

In the grand scheme of things, current interest rates are quite modest. Interest rates are currently low by historical standards, but they have been much higher. For example, in the early 1980s, they were above 18%. It may have been difficult for homeowners who bought during that time to keep up with their mortgage payments, but many saw their homes' value rise over time. 

“The fed driving rates so low in the last 20 years actually created a significant amount of growth in home values,” Whitteker says. “This is not sustainable, but the people who bought back in the 80s, late nineties into the early 2000’s have seen significant equity growth.” 


What mortgages have the best interest rates? 
 
There are several mortgage options, including those with fixed rates, adjustable rates, FHA guarantees, and Veteran Administration guarantees. Your credit history and the amount you have saved for a down payment will play a role in determining which mortgage product is ideal for you. Most buyers prefer the stability and consistency of a fixed-rate mortgage, as the monthly payments are set in advance, and the interest rate is not subject to change. 

“The main types of mortgages used to purchase homes are, FHA, VA, Conventional, USDA and certain state sponsored low-income programs,” Whitteker explains. “Typically, FHA, VA, and USDA have lower rates, but it depends on the borrower’s credit score. The government options (non-conventional) are usually easier to qualify for and tend to be the choice for borrowers with higher debt ratios and lower credit scores.” 


Is the housing market  a seller's market or a buyer's market?  
 
Due to low supply and strong buyer demand, the Williamsport housing market has been dominated by sellers in recent years. There are indications that the market is becoming more favorable to buyers, such as an increase in the number of properties on the market and a decline in the frequency of competitive bidding. This could provide purchasers more leverage in bargaining for a better deal on price or other aspects of the sale. 

“The Williamsport market is balancing out and we are seeing a reasonable amount of leverage coming back to the buyer. This helps to keep the market in balance,” Whitteker says. The housing market overall is turning from a seller’s market to a buyer’s market.  Or I should say the market is becoming more balanced.” 
 

What’s going to happen to the housing market? Will is be a repeat of 2009? 
 
The housing market is unpredictable. However, the present market is distinct from the one that collapsed in 2009. For instance, because lending criteria are higher now than before the last crash, fewer people will likely be approved for mortgages they can't afford. Moreover, the current lack of available homes may help forestall a collapse of the real estate market. 
 
“I think a crash is unlikely,” Whitteker says. “The issues in the economy are more spread out and more inflation related than in 2008 and 2009. The issues then started in the mortgage and credit markets which caused more problems with housing.” 
 

What is a renovation loan? Can I purchase a home with one? 
 
The answer is yes. You can use a loan for renovations to buy a house. Homebuyers ready to invest in a fixer-upper may benefit from taking out a renovation loan, which covers the cost of the home's purchase and renovations. You can save money by buying a house that needs improvement at a lower price and then adding to its worth through upgrades. 
 

Is a reverse mortgage something I can use to purchase a home? 
 
The answer is yes. A reverse mortgage can be used to buy a house. Homeowners over 62 can access the equity in their homes tax-free through a reverse mortgage. This may be a viable choice if you want to buy a house but need more money for a down payment. 

“A reverse mortgage is an option when purchasing a home if you are old enough to do so.  You need to be 62 years of age to use the HECM reverse mortgage,” Whitteker explains. “There are some private options out there in the form of reverse mortgages that allow a slightly younger age.  When using a reverse mortgage, the borrower will need a significant down payment, typically 35% or more.” 
 
 
If I buy a home, how long do I have to live in it to make it a financially sound decision? 
 
The price of a home, the interest rate, and the expense of maintaining a home all influence how long you'll need to live there before breaking even on the purchase. However, it is generally advised that you plan to reside in a home for at least five years to make it worth the costs connected with buying and owning a property. This is because it might take time for the value of a home to grow, and the fees associated with buying and selling a home can be substantial. 
 

Why does a shorter mortgage loan period make more sense when rates are high? 
 
When interest rates are high, a shorter mortgage loan length makes financial sense because it allows you to pay off the loan sooner and saves you on interest. The overall amount of interest you pay might be lowered even more if you choose a loan with a shorter term because shorter loan terms typically come with cheaper interest rates. If you're considering a shorter loan term but need to know if you can manage the increased monthly payments that come with it, think twice before committing. 

“This really comes down to debt-to-income ratio and whether you can afford the higher payment associated with the shorter term,” Whitteker says. “A shorter term is associated with higher principle payments made monthly and a more rapid growth of equity.  I would say less people are likely to qualify for this with higher rates but you certainly pay less interest over the life of your loan with a shorter term.” 
 
In conclusion, purchasing a home is a big investment that calls for careful evaluation of various issues, including interest rates, the conditions of the housing market, and the options available for obtaining a loan. Mortgages come in various forms, and selecting the one best accommodates your requirements and current circumstances regarding your finances is essential. It is also vital to examine how long you expect to live in the property and whether you can afford the related costs of buying and owning a home before deciding on which home to purchase. You will determine whether now is a good time to buy a home and how to do so if you give these aspects great consideration and seek the assistance of professionals when necessary. 

To get answers to all your questions about mortgages and buying a home, contact the Williamsport mortgage experts at Principal Home Mortgage at (814) 308-0959.