Another month, another big surge for the housing market.
According to the Census Bureau, single-family housing starts climbed to a 4-year high in September. It's no wonder the nation's home builders are optimistic about 2013 -- buyers are buying and prices are rising.
A "housing start" is a home on which construction has recently started; often defined by a ground break. In September, Housing Starts for single-family homes rose to 603,000 units on a seasonally-adjusted, annualized basis last month, an 11 percent increase from August and the highest reading since August 2008.
The significance of August 2008 should not be lost.
Not only was August 2008 the last full calendar month prior to the collapse of Lehman Brothers; the sale of Merrill Lynch to Bank of America; and the nationalization of Fannie Mae and Freddie Mac, but it pre-dates the bevy of housing market stimulus introduced between 2009 and 2012 as well.
This includes the 2009-2010 $8,000 federal home buyer tax credit, the Home Affordable Refinance Program, and various servicer incentives meant to help homeowners avoid foreclosure.
September 2012's single-family Housing Starts data puts new construction levels back to pre-recession levels, cementing the notion that the U.S. housing market has moved off its bottom.
Builders think so, anyway. Earlier this week, the National Association of Homebuilders (NAHB) reported home builder confidence at a 5-year high -- nearly triple the levels of last September. Rising foot traffic have boosted expectations for the next six months, and builders plan for a strong start to 2013.
As builder confidence grows, new home prices may, too.
Low mortgage rates have helped to push the housing market forward this year. With average conforming 30-year fixed rate mortgage rates under 4 percent since January, purchasing power is stronger than it's been in history.
As compared to last year, today's home buyers can buy 12% "more home" for the same monthly payment. That goes for all buyers, too. Whether you hail from Orange County, California, or South Orange, New Jersey, your home-buying dollar goes farther this year.
You also have access to low- and no-downpayment mortgages which can make qualifying for a home loan more simple.
The FHA mortgage program's minimum downpayment requirement is just 3.5 percent for first-time and repeat buyers, and both the USDA mortgage program and the VA mortgage program carry no downpayment requirements at all -- you can finance 100%.
Low- and no downpayment mortgage programs were once the domain of first-time buyers. Today, these programs are used by move-up buyers, too; those who are selling their homes are recouping little or no home equity from the sale.
VA loans are for veterans of the U.S. military.
With mortgage rates near all-time lows, it's time to re-evaluate your housing budget to see what you can afford. Start with a maximum payment in mind, and work the payment backwards to find your maximum purchase price.
You'll want to use today's mortgage rates to help with your math, and make sure to account for monthly taxes, insurance, and mortgage insurance, where applicable. You can get mortgage insurance rates online, or from a loan officer. Get started, though, with a rate quote.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2015 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.