It's not quite time to declare 2014 the year of the housing comeback. At this point, just breaking even with last year's pace would be welcome. Market analysts had predicted a spring building boom to jumpstart increased investment in housing, but it's been a slow build. Finally, new home sales climbed in April after several months of decline.
It's safe to say that a sharp spike in interest rates in 2013 are closely correlated to the struggle. In addition, rising home values have proved to be a double-edged sword: While improving home equity and loan-to-value rates for existing homeowners, the higher price tags have also kept would-be new homeowners from breaking into the market.
A key weak link in the equation is a lack of participation among first-time homebuyers. A variety of factors, including shifting housing priorities and high debt burden due to student loans, have prevented 20- and 30-somethings from becoming homeowners. The added hurdles of higher credit requirements and income documentation to qualify have made the process that much more difficult to navigate.
That being said, there are still many ways to achieve your homeownership goals. If you can improve your credit and lower your debt-to-income ratio, investing in a house is a great way to build your wealth and increase your long-term financial security. Added government programs such as FHA also help new homeowners get started with lower down payments necessary. Don't hesitate to ask a loan advisor about qualifications so you can buy your dream house!
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