Joseph Mattero

Top 4 Reasons to Own a Home Owning a home can have an incredible impact on your quality of life. Let's connect if you're ready to make your dream of homeownership a reality.

Today, some are afraid the real estate market is starting to look a lot like it did in 2006, just prior to the housing crash. One of the factors they’re pointing to is the availability of mortgage money. Let’s alleviate these concerns. the Mortgage Credit Availability Index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI (to below 100)... as mortgage money became almost impossible to secure. Thankfully, lending standards have eased somewhat since. The index, however, is still below 150, which is about one-sixth of what it was in 2006. Why did the index rage out of control during the housing bubble? The main reason was the availability of loans with extremely weak lending standards. Lenders were approving loans without always going through a verification process to confirm if the borrower would likely be able to repay the loan. Some of these loans offered attractive, low interest rates that increased over time. The loans were popular because they could be obtained quickly and without the borrower having to provide documentation up front. However, as the rates increased, borrowers struggled to pay their mortgages. In 2006, lending standards were much more relaxed with little evaluation done to measure a borrower’s potential to repay their loan. Today, standards are tighter, and the risk is reduced for both lenders and borrowers. These are two very different housing markets, so there’s no need to panic over today’s lending standards.

Mortgage rates are on the rise this year, but they’re still incredibly low compared to the historic average. However, anytime there’s a change in the mortgage rate, it affects what you can afford to borrow when you’re buying a home. As Sam Khater, Chief Economist at Freddie Mac, shares: Since January, mortgage rates have increased half a percentage point from historic lows and home prices have risen, leaving potential homebuyers with less purchasing power. (See graph below): When buying a home, it’s important to determine a monthly budget so you can plan for and understand what you can afford. However, when you need to stick to your budget, even a...

Expert Insights on the Budding Spring Housing Market Experts agree the housing market is set to bloom this spring. Let's connect to make sure you're ready to buy or sell this season.

Experts agree the housing market is set to bloom this spring. Let's connect to make sure you're ready to buy or sell this season.