Loudoun County has been one of the busiest area counties when it comes to buying and selling homes, and the annual spring market bump in sales traffic typically begins in March and runs through Memorial Day.
Not everyone is of the same mind about the upcoming market or housing sales generally, and the implications for northern Virginia and Loudoun County specifically may not mirror national trends.
Figures reported by Real Estate Business Intelligence for January 2017 show that in spite of the seasonal dip, the combined number of closed sales, contracts and contingent contracts in Loudoun County was up for the first time in four years. Those numbers were 351, 239 and 432, respectively.
“We expect a robust spring market in the northern Virginia region,” said Jeffery A. Long, Vice President of Lending for Apple Federal Credit Union (Apple FCU). “Despite the headlines touting rising interest rates above 4 percent, they are still well below 2013 levels, and we fully expect home sales to be brisk.”
National Association of Realtors (NAR) chief economist Lawrence Yun has a more guarded view about the national outlook.
“Nearly all non-homeowners said they want to own a home in the future (87 percent), but it’s evident that higher rents and home prices … along with limited entry-level supply and repaying student debt have combined to make buying a challenging goal,” Yun said in a statement released Feb. 1.
Carrying student debt is a particular concern for new and younger home purchasers, and is causing many non-owners to delay purchasing a home. Of the 39 percent of non-owners in the second quarter survey who said they have student debt, a majority indicated they are not very or not at all comfortable taking on a mortgage (59 percent), according to NAR.
NAR also reported diminished optimism among non-owners generally over the course of last year, with 55 percent saying it was a good time to buy in the fourth quarter, down from 63 percent in the first quarter.
Nationally, the Mortgage Bankers Association has highlighted its prediction that mortgage purchases will rise to $1.1 trillion in 2017, up 10 percent from 2016. Early indicators support this trend and reveal a strong local housing market, according to a statement from Apple FCU, which expects home values in northern Virginia to grow between 2.5 and 4 percent.
As prospective home buyers ands sellers ponder the upcoming spring market, advice abounds. The following is excerpted from the Top Tips for Homebuyers released by Apple FCU this week.
- Be Pre-Approved Rather Than Pre-Qualified. A pre-approved loan means that a lender has reviewed your mortgage application, credit, and other paperwork and has approved you for a loan of a specific amount. This helps guide your home search, since you know what loan amount you qualify for and allows your lender to pre-approve you in up to three days. In contrast, if you are pre-qualified, your lender has not done a complete application process so you may or may not qualify for the loan in question.
- Know What You Can Afford. What is your comfort level? Your lender will tell you what they think you can afford according to your pay stubs and debt-to-loan ratio, but that often is not your total financial picture. Do you pay for daycare, for instance? That can be substantial, so be sure to take things like that into consideration when you decide how much of a loan burden you want to carry.
- Save for a New Home. The money you save for your loan down payment should have two purposes. First, of course, is to secure your mortgage loan and lower your monthly payments. But in addition, it’s a good idea to put some of that money aside for unexpected problems.
- Understand Your Credit Score. Check your credit score and balances on your credit cards to ensure your debt is 50 percent below the amount of your credit line. For example, if you have a line of $10,000 on your credit card, ensure that your debt is no more than $5,000 or your credit score goes down. The lower your credit score, the more difficult it will be to get a mortgage loan. Ensure your credit card has been open a minimum of 12 months and you have a reliable payment record.
- Identify Your Lending Options. In addition to banks, check out credit unions and other non-profit lenders, as they often have rates that are lower because they do not have shareholders to pay. Other things to consider: is your loan going to be sold to another institution in another part of the country where you will never see a live representative over the 30 years of your loan? Will the lender take your character, personal history and other non-financial things into consideration when determining if they will qualify you for a loan?
- Realize that Lenders are Not Created Equally. Find out if loan decisions at your lender are made locally where the decision makers understand the local landscape, economy, and other issues that influence the market. Ask if your lender will help you if you are turned down for a loan. Loan experts can sit down with potential homebuyers and explain why they didn’t qualify and counsel them on what to do over the next six to 12 months to improve their chances for a loan.
- Shop with a Professional Real Estate Agent. Working with an agent will save you time and frustration. These professionals are wired into expansive databases of inventory and can hone in on the location you choose. Some institutions can help connect you with trusted agents. For instance, Apple FCU offers a program that partners with real estate agents who are experienced, vetted, and rated by a national company, and gives buyers a cash reward equal to 20 percent of the agent’s commission.