A lack of inventory was blamed for the decline in pending home sales in January 2016 reported by the National Association of REALTORS® in their February 29th press release¹ on The Pending Home Sales Index.
According to Lawrence Yun, NAR Chief Economist, “the recent acceleration in home prices and minimal inventory throughout the country appears to be the primary obstacle holding back would-be buyers.” He also mentioned that individuals who are planning to purchase homes in the near future could be waiting for the spring home buying season which traditionally sees many new listings come on the market.
So, what’s causing the lack of inventory?
A recent article in the Fiscal Times² cites a few reasons that there aren’t more homes for sale currently. Among those listed:
- Homeowners still find themselves underwater or with very little equity
- Not enough to make a significant down payment on a new home
- Not seeing enough on the market to entice them to list their current homes and purchase that move up property
Builders aren’t solving the problem as new households are being added to the US market at a faster pace than new single family homes are being constructed. Fewer distressed properties due to a reduction in foreclosures and short sales is another contributing factor.
How can you increase your options?
Are you talking to frustrated home shoppers who would love to buy a new home but can’t find one that meets their needs? Discuss with them how a renovation loan could open up the inventory in their area considerably.
With a renovation loan a home buyer can finance both the purchase of the home and the cost of repairs, updates, or upgrades with a single first mortgage loan. No need to worry about living in a construction site for years as the work must be done by a licensed contractor within a set period of time.
Some of the renovation loan options available at AFR Wholesale include:
- Fannie Mae HomeStyle® Renovation Mortgage
- FHA 203(b) Repair Escrow
- FHA Standard 203(k) Rehabilitation Mortgage
- FHA Limited 203(k) Rehabilitation Mortgage
Learn More About Renovation Mortgages
For more information on Renovation Mortgages, download our FREE White Paper, Leverage Reno Mortgages!
Photography by [SVIATLANA ZYKAVA] © 123RF.com
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