Is 2024 a good year to buy a house in Portland?

Other advantages to buying now

There is another advantage to buying a house now. Up until last fall, buyers have been having a really hard time trying to even find a house, because of the bidding wars, too many people wanting to buy!   Then because of this, sellers wanted to have all the extras added to the offer, like no repairs, buyer covering an appraisal gap, seller getting 30 -60 day free rent back, seller not willing to pay any buyer’s closing costs, and other things.  Also, a seller was not willing to look at any contingent offers, so a buyer had to sell their house first, and then hope to be able to get an offer accepted on another house, all in the span of a month!  It made lots of people decide not to buy because it was just too stressful.  Now it is much easier for a buyer, because many sellers are willing to take contingent offers, and aren’t so demanding!  And there are virtually no bidding wars.  It has taken much of the stress out of buying a house. The other advantage to buying a house right now, is that the inventory is actually going up, so you have more choices.

So looking at the big picture, at the options, and the actual stats of how much a loan is going to cost you, now can actually be the best time for buyers to think about buying a house!  If you have questions or want more information on any of the things we have talked about, you can email, text or call us, and we can answer your questions, help you find a good lender with some of these programs, and start showing you houses!

I talked to my lender about options for buyers who want to buy, but can’t afford the high payments right now, and don’t want to pay high interest rates.  Mike Morneault has been a lender since the 1980s, is amazing, creative but super experienced, and has been through 2 other downturns before this one!  He gave me some ideas as to how he helps buyers afford to buy a house now, without waiting.

• Buy down rate is the best option. A2/1 Buydown is the best deal, because interest rates are going to go back down once inflation goes down.  The way it works is seller pays the cost to buydown the interest rate. Here is an example: $600,000 sales price. If today’s interest rate is 6.25% the buyer’s/borrowers rate for year one will be 4.25%, year 2 5.25% and year 3 and the remaining term of the loan would be 6.25%. The approx. cost to the seller would  be $11,600.
• Then it can work with a Rate Rebound where is we close a loan and rates drop in the next 5 years we will not charge for a new appraisal and give a large credit to cover most or possibly all the closing costs (depending on the loan amount). This is very popular!
• You can also do a permanent rate buydown but since the experts are forcasting interest rates to go down 1% or more in the next 9 to 12 months most people are not doing the permanent rate buydown.
• We have a DPA program. I will work on getting a flyer on the program for you next week. It provides 3.5% to 5% down Payment assistance for Low to Moderate income borrowers. I will work on getting you all the details.
• Some loans are assumable. FHA rates right now are 5.75%. According to HUD FHA loan can be assumable as long as the assumption is approved by FHA, and they meet the minimum down payment requirement of 3.5% down. The main issue with this is the property values are higher and the buyer/borrower would have to have the extra funds to put a larger downpayment which most FHA borrowers do not have. But if seller bought high a year or so ago, and has to sell, or refinanced at a high value, then price might not have gone up that much.
• There are some interest only options on Jumbo loans (Loan amount $726,201 or greater) on 5/1, 7/1 and 10/1 arms. A personal that can qualify for a Jumbo loan rarely needs the interest only option to qualify. Conforming loan amounts do not have any interest only option ($726,200 or lower)
• You can do a USDA loan that is 100% financing, which may give buyer extra money to buy down his rate. USDA Lookup tool to determine property eligibility. https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfhprev
• Oregon Bond does have the rate and cash advantage programs, so if you qualify, it is 100% financing. If the borrower goes FHA they still have the minimum 3.5% investment requirement It would be good to talk to our lender or any lender to see how these programs work!  Cash advantage means Oregon Bond will contribute 3% downpayment assist, and rate advantage means you put down 3%   You still have to pay PMI if you put less than 20% down

Oregon Bond Residential Loan Program
Rate Advantage 5.75%	Cash Advantage 6.375%
Conventional	Conventional
FHA	FHA
USDA	USDA
VA	VA

• VA loans are also 100% financing with no PMI. To qualify: You’re currently on active military duty, or you’re a veteran who was honorably discharged and met the minimum service requirements, You served at least 90 consecutive active days during wartime or at least 181 consecutive days of active service during peacetime.Or, you served for more than six years in the National Guard or Selective Reserve.If your spouse died in the line of duty, you may qualify for a VA loan.

• There is also a new loan program called “all in one” loan that ties in with a checking account and the funds in the checking account are swept to the mortgage at night reducing the balance of the mortgage. I am going through training on it now and will call you both towards the end of the week with more information.
• Lease to own or lease option is starting to become available when sellers cannot sell
• Sellers are also willing to do Seller Contract, or even a short term seller contract with balloon payment in 1-3 years where buyer refinances at a lower interest rate
• I asked about 40 year fixed but it doesn’t lower payment by much, yet people have to pay so much for for the final price, and if they seller in 5 or even 10 years, they have hardly paid off any principle, unless they pay a lot extra on principle, which kind of defeats the 40 year loan!
• There are two loan programs that can help buyers afford houses at low and moderate income levels. HomeReady mortgages offer low rates, minimal risk-based price adjustments compared to other programs, and reduced mortgage insurance costs.  3% down, can get down from downpayment assist, gift, cash grant or another loan. It is geared to low and moderate incomes. Eligibility for a HomeReady mortgage loan compares the borrower’s income to the applicable area median income (AMI) for the property’s location.
• Home Possible® include low down payments, fixed-rate mortgages, reduced mortgage insurance coverage levels, flexible closing cost funding options, and no cash-out refinancing. Home Possible loan sets a higher minimum credit score guideline (660) than the HomeReady loan, it also provides an option for borrowers who don’t have a credit score because of a lack of credit history. However, that no-credit-score flexibility comes with a minimum 5% down payment

If you have questions about the different options available to buyers, to help them buy a house in this crazy period, send us an email, text or call us, and we can answer your questions and/or put you in contact with Mike, our lender.  There are a lot of programs out there that can help, making it possible to buy a house right now without huge payments or high interest!