While mortgage rates are low, housing supply is also low but demand is high. This is setting off bidding wars and keeping housing prices high in some areas.
Lenders are now also requiring higher credit scores and larger down payments in order to qualify for a loan.
This is making buying a home more challenging for many first time home buyers. However, if they qualify, low interest rates are giving them the ability to afford larger homes.
“It’s more important than ever to be preapproved for a home loan — not just prequalified — when shopping in many markets, agents say. Preapproved means you have submitted income information and undergone a credit check, and have been given the green light to borrow a specific amount of money. Being prequalified is more of an estimate.”