Summary
Housing prices and mortgage rates are dropping in many U.S. cities, making it easier for buyers to afford homes. Buyers should start saving for a down payment now and consider how to protect and grow their savings while improving their credit scores to get better loan rates.
Key Facts
- Sellers now outnumber buyers by over 600,000 nationwide, a large gap.
- Home prices have dropped in more than half of the top 50 metro areas, with big declines in cities like Austin, San Diego, San Jose, Minneapolis, and Washington D.C.
- Mortgage rates are falling below 6%, which helps buyers get better loan terms.
- A typical down payment goal is 20% to avoid extra costs like private mortgage insurance.
- Special loan programs exist for low- or moderate-income buyers, some requiring as little as 0% to 3.5% down.
- It's best to keep down payment savings in low-risk, liquid accounts like high-yield savings accounts to earn steady interest.
- Improving credit scores before applying for a mortgage can lower the interest rate, saving buyers thousands of dollars over time.
- For example, someone with a credit score of 740 may get a mortgage at 6.4%, while a 620 score could mean 7.17%, which costs more over the life of the loan.
