More data is released from the end of Summer run. The Baltimore-Towson area tops off a list of 10 major metro areas seeing an increasing share of FHA home buyers. FHA loans are low down payment mortgages with an average down payment of about 3 percent of the purchase price. Nationally, those using FHA low down payment loans in August, 2015 increased to 23.1% of the total share of all single family and condo sales. This is a 5.3% increase over August, 2014 levels.
The report is part of a long study published by RealtyTrac. Here’s a snippet from their Vice President describing national market activity:
“It wasn’t just cash buyers that kept home sales volume strong in August,” said Daren Blomquist, vice president of RealtyTrac. “The share of buyers using FHA loans in August increased 30 percent from a year ago, and the year-over-year increase in the share of FHA buyers was 50 percent or more in markets such as Nashville, Phoenix, Colorado Springs, Portland and San Diego. Those markets with a solid and fast-growing share of FHA buyers are poised for longer, more sustainable growth going forward than markets that are more dependent on capricious cash buyers.”
The Baltimore-Towson market currently sees 32% of its home buyers using FHA low down payment mortgages. “The Baltimore market makes sense as a strong FHA performer,” said Gerard DiRuggiero. “Baltimore offers very attractive housing prices and a ton of urban home values – if you’re willing to renovate or are willing to invest in the long-term value of a neighborhood, you can pull a lot of value out of a first time home purchase. The trick to using FHA for a buyer is to educate them on how to choose a price range where they can actually compete with other buyers at the offers table. There are higher fees and other costs inside FHA that actually increase your monthly payment overall. It’s the tradeoff to low money down and $0 down loan programs.”
Don’t feel left out if you’re looking in Washington, DC or other parts of Maryland. “There’s parts of the DC market that still offer situations similar to Baltimore. We look at these neighborhood zones weekly in our free Buyer Workshops program. There’s great values to be had close to where you want to live, as long as you know where to look and have aggressive agent representation on your side,” continued DiRuggiero. “A lot of our Workshop attendees end up successfully buying.”
The next Workshops are Tuesday at 5:30pm and Saturday at 10am. RSVP and let us know you’re coming by. Feel free to bring a friend!