With the sun shining today, we can only hope that our delayed Summer has finally arrived. With it comes a Summer market that is offering up a few surprises. The biggest surprise was the swift implementation of new, more restrictive, mortgage rules. The implementation of these rules will further decrease affordability for buyers, especially first time buyers, in the short term.
To recap the 4 major changes:
- All insured mortgages (less than 20% down) will be subject to a maximum 25 year amortization period. This is down from 30 years.
- There will be no insured mortgages over $1m. This will impact local families stretching to get into a detached home.
- Home equity lines of credit will be reduced from 80% to 65%.
- Re-financing will be reduced from 85% to 80%
Active inventory has also levelled out this month, with several markets even showing slight declines in active listings compared to last month. Listing inventory is still substantially higher than this time last year, but I suspect we have seen a peak in listing inventory for the time being. Sales volume showed declines of 25-38% over last month as well, as we enter into our seasonally slower time of the market. Look for sales to slow down further through July and August as the weather gets warmer. Average pricing remains relatively stable, with most markets showing slight increases over both last month and this time last year.
Hope you have an amazing start to the Summer and don't hesitate to call if you have any questions about the new mortgage rules or market trends.
Unique Homes Blog
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