A recent Zillow press release details the slowdown in construction of single-family homes in the U.S. This data can be used to observe some of the challenges faced in the country as a whole, in addition to individual metropolitan areas such as Tampa. As the housing market tightens, it becomes increasingly important to use an experienced mortgage broker to be competitive when buying a home while also enjoying a low interest rate.
Aging Homes in U.S.’s Largest Metros
In the 35 largest metropolitan areas in the U.S., the average age of homes sold increased from 24 years old in 2007 to 37 years old in 2017. This increase is largely attributed to a dramatic decrease in home building since the real estate bubble burst in 2008. In the majority of these metro areas, the rate of issuance of permits to build single-family homes decreased by more than 50% over the same 10-year period.
Tampa New Home Builds Are Slowing
In Tampa, the rate of issuance for permits to build single-family homes decreased from 5.4 per 1000 residents to 2.5 per 1000 residents. So far, it’s resulted in the median age of homes sold in Tampa increasing from 23 years old in 2007 to 35 years old in 2017.
The real-life effect of this shift is a tighter housing market with increased competition. Home prices continue to increase in Tampa as the market tightens even more. Furthermore, Tampa is a highly desirable place to live, being named one of the top cities to live in the U.S.
First-time homebuyers are also struggling under current market conditions with:
- Being approved for higher mortgages to buy more expensive homes.
- Finding homes at affordable prices.
- Competing against other homebuyers with more experience and resources.
Lower Supply of Homes and Higher Demand
Underbuilding has led to a lower supply of homes to satisfy the needs of a growing population. It’s estimated that there is a gap of millions of homes in the U.S., based on how many would have been built at previous rates of construction versus current rates. New construction is picking up too slowly to cover this gap, especially considering it came to a near stand-still after the 2008 real estate market collapse.
Challenges Buying Older Homes
With the aging homes on the market, homebuyers are experiencing challenges that come along with older homes. Maintenance issues, structural security, outdated building codes, and other challenges can all present themselves to buyers looking at older homes. As the median age of homes increases, these challenges are set to grow as the market continues to tighten.
Working with an Experienced Mortgage Broker
As the housing market becomes increasingly competitive, it is more important to use an experienced mortgage broker who can provide the services you need to be as competitive as possible when buying a home.
Here are some things to look for when searching for a mortgage broker before buying a home or refinancing.
Mortgage Pre-Approvals: When negotiating to buy a home, a rigorous pre-approval is advantageous because it shows you are highly likely to close on the home.
Home purchases often fall through because the potential buyer is unable to get a home loan to buy the home at the offered price. Being pre-approved for a mortgage by an experienced and reputable mortgage broker can instill confidence in the seller and Realtors that you are negotiating in good faith and can close.
Low Interest Rates: Experienced mortgage brokers work to get their clients the lowest possible interest rate, which gives homebuyers the ability to be more competitive when making an offer on a home.
Fast Closings: Closing times on a home sale are negotiable. A faster closing is very attractive to sellers, who may need to sell their home quickly to buy another home under contract or want to avoid another mortgage payment on the home.
Being able to close more quickly than other buyers competing for a home gives you a competitive edge when negotiating to buy a home.
Video: How to Select a Mortgage Broker
Marimark Mortgage is based in Tampa, Florida and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.