Strategies for navigating today's housing market
Submitted by Carson Now Reader on Tue, 03/26/2024 - 12:29pm
According to Redfin, home prices in Nevada were up 9.7 percent year-over-year in February 2024. At the same time, the number of homes for sale in the state fell by 20.8 percent. While home prices are on the rise, the supply of homes for sale is not meeting demand, creating what is considered a “tight” housing market across the Silver State.
As the spring homebuying season gets underway, Greater Nevada Mortgage (GNM), a subsidiary of Greater Nevada Credit Union, is providing advice to help buyers navigate current market conditions and to prepare for a decrease in interest rates that many experts anticipate later in the year.
Buyers should be aware of their debt-to-income (DTI) ratio
A borrower’s DTI ratio is the percentage of their gross monthly income that goes toward monthly debt payments. Lenders use DTI to determine an individual’s borrowing risk and it affects what mortgage they may qualify for. According to Art Williams, GNM’s vice president of sales, a 45% DTI is generally the highest ratio a borrower can have and still qualify for a mortgage. The primary way borrowers can improve their DTI is paying down debt.
“We work with buyers who want to improve their DTI by outlining a budget to help them pay down debt,” Williams said. “While paying down debt takes time and may delay the home-buying process, it will pay off in the long run to get a mortgage with a better interest rate that best fits a buyer’s needs.”
Getting pre-approved helps buyers know what they can afford
Buyers who get pre-approved for a home loan have provided basic financial information to a lender, which provides an estimate for how much house they can afford. Preapproval makes it easier to set a budget. According to Williams, a pre-approved buyer is in a better position to make a competitive offer. In Nevada’s tight housing market, buyers face making timely offers on a home they want before the seller accepts another offer. Additionally, a pre-approved buyer can act quickly to make purchase offers if interest rates decrease, as many experts predict will happen later in the year.
Explore lending options
Home buyers can explore several mortgage and home types to find what fits their needs. With conventional 15- and 30-year fixed rate mortgages becoming increasingly inaccessible for many buyers due to high interest rates, GNM offers an adjustable rate mortgage (ARM). ARM is a type of loan with a variable interest rate. After an initial fixed-rate period, rates may adjust over time — increasing or decreasing by no more than 2 percent — in line with the housing market and other economic factors.
Down-payment assistance programs are also available and help first-time home buyers through grants and loans to gather a down payment, which is often an entry barrier for those looking to become homeowners. Several government-backed loans including those offered through the Department of Veterans Affairs, the Federal Housing Administration and the U.S. Department of Agriculture, are designed for first-time home buyers, offering more competitive interest rates, down payment flexibility and less credit score requirements. Williams encourages people to work with a qualified mortgage expert who can best determine if these assistance programs are right for them.
“Don’t rule yourself out,” he said. “Regardless of where you are in the home buying journey, finding yourself an expert to guide you along the way can make all the difference.”
An additional tip for buyers is to consider a wider variety of home types when looking to purchase — mortgages for condominiums and manufactured houses are common and provide housing options that are typically more affordable than traditional, single-family homes.
“GNM is here for our community and we pass savings back to our borrowers and customers to help them achieve their goals,” said Williams. “Nothing feels better than getting someone into their first home or getting them into their dream home.”
Purchasing a home is a major milestone and there are options and resources available for buyers through GNM. Those interested in learning more about financing a home through GNM are encouraged to meet with a qualified mortgage lending expert and request an appointment by visiting GreaterNevadaMortgage.com or calling 775-888-6999.
Greater Nevada Credit Union is headquartered in Carson City, Nev., and has been helping Nevadans with their financial needs for the past 75 years. The credit union serves more than 88,000 consumers and small businesses and has $1.76 billion in assets. GNCU’s subsidiaries include Greater Nevada Mortgage, Greater Commercial Lending and Greater Nevada Insurance.
GNCU is a certified Community Development Financial Institution (CDFI) and has been consistently recognized as a Best Financial Institution in many of its service areas and as a top employer by the Reno/Tahoe Best Places to Work Awards. GNCU is also the title sponsor of Greater Nevada Field in Reno. For more information, call (800) 421-6674 or visit gncu.org.
