New data from S&P Dow Jones and CoreLogic reports that home prices increased at their fastest pace in over three years.
The S&P CoreLogic Case-Shiller National Index rose to its fastest annual rate since June 2014. On a national level, home prices increased by 6.2 percent, also up by 5.9 percent from August’s increase. The 10-City Composite also marched forward by 5.7 percent in the month of September, a 5.2 percent increase from last month’s while the 20-City Composite also had a 6.2 percent year-to-date increase. This is up from August’s 5.8 percent increase.
Home price indices in all 20 cities tracked by these indices increased per year-to-date comparisons. Out of the 20, 16 saw their annual price increases accelerate from the previous month.
[sc_content_link label=”Get today’s rates!”]
Is it letting up soon?
To put things in perspective, eight cities in the country surpassed their pre-crisis peaks. The western part of the country is where most of the largest gains are concentrated. These cities include Seattle, Las Vegas, San Diego and Portland. Meanwhile, cities with the least increases include Atlanta, New York, Miami, Chicago and Washington.
Will these increases slow down in the near future? Experts and housing analysts don’t think so.
“Most economic indicators suggest that home prices can see further gains,” David Blitzer, managing director and chairman of the Index Committee in S&P Dow Jones Indices says. “Rental rates and home prices are climbing, the rent-to-buy ratio remains stable, the average rate on a 30-year mortgage is still under 4%, and at a 3.8-month supply, the inventory of homes for sale is still low.”
Accelerating home prices have been a major hurdle to homeownership for many buyers in the US. Because many of the homes in the country’s major urban areas have increased beyond affordability for the average buyer, most of them are forced to delay home buying or to look elsewhere.
[sc_content_link label=”Find a lender today. Click here.”]
Find mortgage assistance options
If you are among the millions of Americans who are finding it hard to own a home because of the skyrocketing price tags, you may want to explore mortgage assistance programs.
Government-backed home loans today exist to especially aid the struggling American borrower get access to the needed financing. These mortgage programs include:
FHA loans. With a 3.5 percent only down payment requirement, this loan program specially caters to first time home buyers with decent credit ratings. It offers competitive interest rates but the borrower needs to pay mortgage insurance premium. The loan is assumable, meaning if the owner decides to sell the home, the buyer can take over the loan payments without going back to square one.
USDA loans. Designed for low-to-moderate income borrowers for homes in the country’s designated rural regions, a USDA mortgage provides 100 percent financing and competitive 30-year fixed interest rates. There is no maximum purchase price for the properties but the borrower must be able to meet the income eligibility requirement set by the department.
VA loans. Like the USDA mortgage program, the VA home loan program offers 100 percent financing without the need for a down payment. Military service members, national guards, and reservists both retired or on active duty including their eligible spouses may qualify for a VA loan. Aside from fixed interest rates, there are no charges placed on prepaying the loan. The borrower, however, needs to pay for a VA funding fee. But the costs of closing can be wrapped into the loan amount.
Aside from these federally-insured mortgages, credit unions are also good sources of financing with competitive rates. You can also find traditional banks and lenders who may be willing to work with you on your intention to purchase a home, via some specialized home loan programs.
Another option is to find down payment assistance programs. Every state has their own programs that seek to help cash-strapped borrowers get a space of their own. Use our search tool to find down payment assistance programs in your area.