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This buyer’s market, which has been a buyer’s market for quite a long time, is turning into a seller’s market. That’s good news for half of the folks out there. The reason is because we have very low inventories right now; and our mortgage rates are still quite low; new construction is starting to slow a bit; and of course, it’s summertime. That’s the main moving season.
When will those mortgage rates rise?
The surprise has been that lately they’ve dropped! A 30 year mortgage is now, on average, 3.9%. National average for 15 year is only 3.1%. That’s about the same as it was a year ago. We do expect them to go up, but it will happen slowly.
What’s happening in Jackson, Mississippi?
The median home price is now $173,500. That is an increase of 8.5%—very good news for sellers out there. Pending sales are up 3.7%, and new listings are only up 0.2%. That means inventory is down 6.4%. That’s why that is good news for the sellers out there.
What if you’re buying? How much house can you afford?
The average is 2 ½ times your household income or 31% of your gross income for the mortgage. Or you can calculate it on all of your debt: 43%. But you still will need the down payment. Conventional loans require a 20% down payment. If you don’t have that much, you’re going to have to pay mortgage insurance, and that will add about 1% annually. On a $250,000 house, this could mean $200 a month extra.
If you’re military, you could qualify for a VA loan with no down payment and no mortgage insurance. Those rates are even lower: 37.5% below those very low rates.
Back to the seller’s market. Are you interested in selling?
The prices have gone up, but be realistic on that price. Check with a local agent. Get them to give you some help on pricing that house appropriately for your market. And fix up the place. You need to make sure it looks in pristine condition. If you need to, get some staging help. The first thing they’ll tell you, which is what I have heard, is clean out the clutter.