"New homes" are selling at their fastest pace since 2008.
According to the Department of Housing and Urban Development (HUD), the number of new homes sold climbed to 476,000 in May on a seasonally-adjusted, annualized basis -- a 2 percent improvement from the month prior.
U.S. housing is now a seller's market. Buyers are preparing for rising home prices throughout the rest of 2013 and into the start of 2014, at least.
The best "deals" you get in housing may be the ones you get today.
Sales of single-family, newly-built homes are soaring.
In May, the annualized total of 476,000 topped Wall Street estimates, reaching its highest point since July 2008 -- a span of 58 months which includes the tax-credit fueled years of 2009 and 2010.
New construction is in demand.
Furthermore, despite a 3 percent increase in available homes for sale, the national "housing supply" remains a scant 4.1 months. This means that at the current pace of home sales, the complete U.S. inventory of new homes for sale would go under contract no later than Labor Day.
This marks a half-month improvement from one year ago and agrees with recent homebuilder surveys which show that the number of home buyers previewing homes is at its highest rate since last decade.
Low mortgage rates and rising U.S. rents have help spur demand for new homes. Tight home supplies have played a part, too. There are just 161,000 new homes for sale nationwide.
Scarcity of supply is among the reason why the average sale price of a new home is 10% higher as compared to one year ago. Home prices are expected to rise through the summer and fall months, as well.
For today's buyers of new construction, 20% downpayments are not necessary. The same low- and no-downpayment mortgage options available to buyers of "existing homes" can be used when buying from a builder.
Among the most popular new construction programs is the Conventional 97.
The Conventional 97 is a Fannie Mae loan product requiring just a three percent downpayment. Minimum FICO scores are enforced and borrowers must meet debt-to-income thresholds. However, buyers using the Conventional 97 program may also receive cash gifts for their entire home downpayment.
The Conventional 97 program is available in all 50 states.
Another popular low-downpayment program is the Department of Veterans Affairs' VA mortgage program available to eligible military borrowers. With no downpayment requirement and aggressive mortgage rates, the VA home loan offers reduced qualification standards as compared to a conventional loan, and never requires mortgage insurance.
And then there's the USDA Rural Housing Mortgage, a program which also allows for 100% financing to qualified buyers in qualified census tracts. Don't let the name fool you, however -- the program is called the "Rural Housing Mortgage" but it's available in many U.S. suburbs.
USDA loans require minimal mortgage insurance coverage and offer low rates which often beat conventional ones.
As the U.S. housing market improves, the cost of homeownership is rising. Home prices are up and mortgage rates are, too. The bottom of the market has passed. "Good deals" in housing still exist, however.
The first step in buying new construction is determining for how much home you qualify. You may also want to compare your "builder's lender" to market rates, in general. You can do all that online. It's fast and free and social security numbers are never required.
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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2016 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)