Even though it's still annoying and time-consuming
Let’s start with the good news: It takes a full week less to buy a home than it did last year.
The bad news: It’s getting harder to buy a home since costs are so high right now.
LendingTree says mortgages are closing at a faster rate than they were in 2016, which is great if you’re in the market for a home and are prepared for a long, grueling process. But Nationwide says that it’s getting more difficult to prepare to buy a home since there’s a huge demand and not enough availability.
LendingTree reviewed 5,000 closed loans for 14 months and discovered that the median time from shopping for a home to closing on a mortgage dropped a full seven days from 2016 to 2017. Loans closing within two months are up by 27 percent, while loans closed within 30 days are up 19 percent. This means it’s faster to buy a home than in years prior.
“We’ve seen average closing times shorten over time due to innovations in the industry,” says LendingTree’s Chief Sales Officer, Sam Mischner. “As the process becomes more automated, simplified and streamlined, we believe closing times will continue to decline.”
The dip in how long it takes to close on a home comes from an increase in automation and digital enhancements in how companies operate.
But even as mortgages are taking less time to get, there needs to be buyers to take advantage of them. Nationwide says that the lack of affordable housing turns off would-be buyers.
“The average price of a lowest-tier home nationally has increased by 56 percent over the last five years,” Nationwide says. “By comparison, the value of a home in the highest tier has increased by 33 percent over the same period.”
Nationwide notes that this isn’t the first time the housing market has seen gaps like this. It’s happened before, in 1987 and in 2005 — the most recent housing market crash. They say in both instances, housing price growth slowed down “significantly.”
Even with growth expected to slow, David Berson, Nationwide’s Senior Vice President, says it’s different this time around.
“Demand continues to be the primary driver of today’s market expansion,” says Berson. “While affordability is a growing concern, we don’t see a demand slowdown as inventory turnover continues apace and new home building lags household growth.”
So, it’s definitely still in the interest of most people to buy a home. Millennials want to buy homes, even as the debate over renting vs. buying continues. In most cases, owning a home is cheaper and overall, can save you money — but only if you live in an area where paying a mortgage is cheaper than paying rent.
But as the costs of homes rise and we may or may not be in a housing bubble right now, potential homebuyers are having trouble coming up with money to afford to buy a home. Even if it is cheaper in the long run. Some Americans don’t believe it’s worth it to own a home, and about 1-in-4 of them plan on staying away from buying one in the next decade.
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Article last modified on November 16, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: It’s Now Faster to Buy a Home - AMP.