According to a recent article in Mortgage Professional America “The National Association of Hispanic Real Estate Professionals released a report today detailing that the reform, which could see the 10 million undocumented immigrants living in the US a pathway to citizenship, could add 3 million prospective homebuyers to the market. This could potentially spur approximately US$ 500bn in new mortgages and US$ 25bn in mortgage origination and refinance income, the report said. Approximately a third of all foreign-born immigrants are currently homeowners, according to a report from the Research institute for Housing America.”
The article goes on to project that in states like Texas and Florida, immigration reform will bring as many as 834,000 people looking to find a home.
With this influx of home buyers, a potential increase in property sales is inevitable. Keeping this in mind, if property values maintain the stable position they have held for the last few months, the future of the housing market has bright potential upside in the coming years, once the new immigration reform legislation takes hold.
Even the potential increase in home sales can affect property values and sale prices in the next year and a half. While interest rates are expected to stay low for a while longer (we hope!), the time to move and find a home, if you intend to be in the market in the next year or two, is now. The basic rule of supply and demand will soon be a player in the ability for potential homeowners to find the home of their dreams, at the price they can afford.
The Commerce Department reported that Housing Starts surged 15% in September to its fastest pace in more than four years signaling that the housing sector’s recovery is gaining some momentum. Starts grew by 872,000 units on an annualized basis, well above the 768,000 expected. Building Permits, a sign of future construction, increased by more than 11% to 894,000 units annualized, above the 815,000 expected. Even RE/MAX reported that home prices have increased from levels since last yearwith median prices gaining 7.8%. In addition, inventory levels have declined by 29% since last year. The lower inventories have actually spurred on bidding wars in certain sectors around the nation.
The next factor is Down Payment. An individual having a larger down payment will get a better interest rate. In mortgage language it’s called Loan to Value (LTV). LTV expresses the loan size in comparison to the value of the property. The greater investment you make in your property, the less risky you are to the lenders, which equates to better interest rates. In addition, keep in mind that if you put down less than 20%, you will pay Private Mortgage Insurance. Private Mortgage Insurance does not cover you as a borrower it covers the lender. This blog is not meant to state that a borrower should always put down 20%, it is just information to let you know that the interest rate may be slightly higher with less than 20% down.