Homeowner demographics changing
With today's market, who is buying homes? What are your options?
By Priscilla Castro
The Collegian
It’s the American Dream to own a home. Owning a home though is not as affordable as it was about 20 years ago. Prices of homes have skyrocketed and Fresno is no exception.
The median price of a home in Fresno in January of this year was just under $350,000. A big factor in determining the price of a home is its location. “A house in the north part of Fresno is a little more valuable,” said Aram Atikian, a realtor for London Properties. “A lot of people also want new houses, people want better places.”
There are now more options, and in a way some help to get buyers into homes. There are now interest-only loans, where the buyer pays only the interest on the house, but no money is being applied towards the principal of the home, but the buyer cannot pay solely interest forever. The buyer will eventually have to start paying on the principal of the home. This process can take from three to 10 years, but when this happens there would be an increase in the monthly installments, according to the Boston Herald’s Web site. When this happens the buyer’s payments can increase by 30 percent.
This is why some have labeled these type of loans risky. “They are risky if someone doesn’t know about it, because it is going to add up,” said Atikian. He recommends that buyers learn about the loan before they buy.
There are also fixed-rate loans, and adjustable-rate loans. A fixed-rate loan is where the interest-rate is locked in. The monthly installments on the house financed by a fixed rate loan, will remain the same throughout the life of the loan.
The adjustable-rate loan works a little differently. With adjustable rate-loan the monthly installments will vary each month. If interest rates go up, then the monthly installments will go up. There has also been an increase with the length of financing a home. Even though people can now borrow for longer, it still isn’t the most common thing homebuyers do. Buyers are still choosing the 30-year-loan, more than any toher loan. “It’s a little longer than the 15-year-loan, but it is easier to have less payments,” said Atikian.
There has been a little bit of relief for buyers. The prices of homes are not increasing like they were a year ago. “The market is relaxing, more people can buy a house at 5 to 10 percent lower,” said Atikian. “There are 4,000 houses on the market for Fresno County.” There used to be people lined up to buy a house and right now buyers have more to choose from, since the market has slowed down.
Even though buying a house can be difficult, Atikian said, the first house is usually easier to purchase, because they can get better rates off the loan. “I would like to see people buy their first house,” he said.
Comment on this story in the Features forum >>
|
