Home Buyers See Signs of Relief This Spring

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“For first-time buyers, there’s inventory they can afford,” Mr. Murphy said. “But many listings can get 20 offers or more.” Typically, he said, buyers who are able to pay cash win the contest.

Similarly, in Kansas City, Mo., sellers still generally have the upper hand, said Bobbi Howe, an agent with Keller Williams Kansas City North. Buyers may need to be flexible and accommodate the seller’s needs, she said, such as offering an extended closing date or extra time to move out of the house.

Entry-level shoppers who are financing their purchase should obtain prequalification from a lender, Ms. Hale said, and should be prepared mentally for a longer search that will probably involve some rejected offers. “It requires a lot of persistence,” she said.

Here are some questions and answers about home buying:

How much of a down payment is required to buy a home these days?

The old rule of 10 to 20 percent down is no longer ironclad. Both Freddie Mac and Fannie Mae, the quasi-governmental mortgage finance companies that back most home loans in the United States, have been offering programs requiring just 3 percent down for several years. In the first three months of this year, 80 percent of first-time home buyers used some form of mortgage with a low down payment, according to a report from Genworth Mortgage Insurance.

A larger down payment still offers advantages, though — such as avoiding the need for private mortgage insurance, which will increase monthly payments.

Can I use a gift from a family member as a down payment?

Yes. Nearly a quarter of borrowers use funds from friends or family to help finance a home loan, according to Freddie Mac. You should, however, document that the money is truly a gift rather than a loan; lenders provide a formal gift letter that the donor can sign.

“Generally, lenders frown on a loan for a down payment,” said David Zuckerman, a certified financial planner and a spokesman for the CFP Board, which sets professional standards for planners.

What are current mortgage rates?

The average rate on a 30-year, fixed-rate mortgage fell to 3.99 percent, the first time it has fallen below 4 percent since January 2018, according to Freddie Mac’s weekly survey released on Thursday. A year ago, the average rate was 4.56 percent. The lower rates should give a boost to the housing market, the company’s chief economist said.

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