The American dream of owning a home has been a bit fuzzy over the past several years, in part the result of the economic downturn and the inability of some homebuyers to qualify for a mortgage.
Add to that, homeowners who found the market value of their homes plummet while continuing to pay the mortgage on the higher ‘value.’
Yet there are signs that the housing market is on the upswing, albeit a slow rise. And those who predicted the homeownership dream was all but in the dumpster may have been too pessimistic.
So what signs are pointing to a reawakening of the dream to buy a home?
According to information from Fannie Mae, 73% of Americans think it’s a good time to get off the fence and start looking. The online real estate website, Trulia, found 70% of Americans continue to hold onto the dream of owning their own home.
Harvard University’s Joint Center for Housing Studies found that 86% of people age 25-34 believe owning a home is preferable, financially, than renting.
Relatively low mortgage rates continue to offer potential buyers attractive incentive to enter the home-buying market. But despite reports that the number of short sales and foreclosures is declining, the impact on home values continues to impact the appraisal process.
Appraisals are an important factor in the bank’s lending decision. If a buyer submits an offer on a home and the appraisal comes in below the offer price, the lender won’t lend the buyer the money based on the offer price. The seller will either have to reduce the price to reflect the appraisal price, or the buyer will have to pay the difference between appraised price and the sales price, based on the type of loan. (The lender generally bases the amount of the loan on a percentage of the appraised value.)
But all things considered, owning a home is once again the dream of Americans.