Too Many Americans Unprepared for Mortgage Costs
In fact, the year-over-year home price appreciation is at its lowest point since 2012, signaling fewer rising residential markets across the U.S. and a significant pullback on double-digit price growth for homes.
For the record, the national median single-family home price is at $212,400.
That's not necessarily bad, either for homeowners and homebuyers, experts say.Read More: Don't Celebrate Mortgage When You Don't Know What You're Doing "National median home prices began their most recent rise during the first quarter of 2012 but had climbed to unsustainable levels given the current pace of inflation and wage growth," says Lawrence Yun, the NAR's chief economist. "At this slower but healthier rate, homeowners can continue steadily building equity. Meanwhile, for buyers, increased supply with moderate price gains is giving them better opportunities to choose." With home values rising, albeit slowly, you'd think homebuyers would have a good grasp on what it costs to handle a mortgage and a new home — but maybe not. Discover Home Loans says 87% of potential buyers say they "are confident" in their ability to land a good mortgage deal, but adds that "many have not done the math to determine their costs." The financial services firm says 63% of possible homebuyers say they are "overwhelmed" by the amount of mortgage information available to them, and that's not a good launching point for a home purchase. The less a buyer knows about mortgage costs, the higher the odds of that buyer getting into a home he or she can't afford. That's a real bank account drainer and a vicious cycle that can lead to financial problems in other areas, including gaps in retirement planning and college savings. Read More: What It Means to Have Foreclosures at Six-Year Lows The survey also shows only 52% of potential buyers know what their expected monthly mortgage bill will be, and another 41% haven't even calculated a down payment. Buyers should talk matters out with a trusted professional, or at least family and friends, before signing on the dotted line. "The industry is becoming more transparent in an effort to help homebuyers become informed about changes that may affect their process," says Cameron Findlay, chief economist at Discover Home Loans. "The sheer amount of information can lead to confusion and stress." "Those looking to purchase should work closely with their lender and Realtor to make sure they are comfortable with mortgage terms and understand the impact a loan will have on their finances," Findlay adds.
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