Law Office of Ryan S. Shipp, PLLC

Increasing home prices make ARMs more popular

As property values increase, Florida residents may be willing to get creative when it comes to financing a home purchase. According to Inside Mortgage Finance, there was a 40 percent increase in adjustable rate mortgages between the first and second quarters of 2017. While they offer lower rates and a rate that is fixed for five years, they may be riskier in the long-term compared to the traditional 30-year fixed mortgage.

Over the same time period in 2016, the number of ARMs increased by just 15 percent. This may indicate that buyers are struggling to afford homes as prices continue to increase. Home prices were 6.9 percent higher in August 2017 than a year earlier according to CoreLogic, and 6.7 percent higher in July 2017 than in the previous July. It is thought that the increase in home prices is due in part to mortgage rates that have stayed low.

Some believe that the increase in home prices may start to come down as mortgage interest rates start to rise, and it is thought that this may start to occur in 2018. However, others say that the tight supply of homes may keep prices higher. Currently, roughly half of the top 50 housing markets in America are considered to be overvalued when compared to income and employment rates.

People who are looking to buy residential property may benefit from the help of an attorney. Legal counsel may be able to search for issues with a title or any problems with contract or mortgage terms. This may increase the odds that buyers understand what they are getting into prior to signing any paperwork.

No Comments

Leave a comment
Comment Information

Law Office of Ryan S. Shipp, PLLC | 814 W. Lantana Rd., Suite 1 | Lantana, Florida 33462 | Phone: (561) 699-0399 | Map & Directions