KTRH Local Houston and Texas News

KTRH Local Houston and Texas News

KTRH-AM covering local news from Houston and across Texas.

 

Housing Market "Correcting" Amid Rising Rates, Fewer Loan Options

Mortgage credit availability hit a nine-year low in September, but lenders insist not all is lost amid rising inflation and rates.

According to the Mortgage Bankers Association: "As mortgage rates have more than doubled over the past year, resulting in a drop in refinance activity, lenders have worked to reduce excess capacity and costs by eliminating underutilized loan programs."

Chris Nooney, certified mortgage planner with Draper & Kramer Mortgage Corp, says banks are still willing to lend, but the availability of low down payment, or jumbo financing, is shrinking.

"While they were much more prevalent while the market was hot and we were in the middle of a refinance boom, lack of demand is causing lenders to change their product mix and product availability," he says.

Nooney insists anyone with good credit should not be scared off by high interest rates.

"All that is is a cost of borrowing. If you can adjust your spending habits, you can afford to purchase a home in this market," he says, noting $150 a month at Starbucks could be applied to a mortgage.

After more than doubling so far in 2022, MBA's baseline forecast is for mortgage rates to end next year at around 5.4 percent. MBA expects national home prices will be roughly flat in 2023 and 2024.

"Home prices did increase rapidly across the United States due to inventory, or lack of inventory," says Nooney. "Now we are in a market that is actually correcting. It's not that homes are depreciating in value, they're stabilizing in value."

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Photo: Getty Images


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