(CBS DETROIT) – A tight housing market could mean rising costs for home buyers looking to settle in Metro Detroit.
According to Bank of America, home prices are up 11% from last year.READ MORE: Biden Announces Nearly $3 Billion To Address Food Shortages
“We see many folks who currently live in homes but there’s an apprehension to sale based on the fact that there’s such a lack of inventory,” said BOA Lending Market Leader Vice President Michael Khaireddine.
“It’s this circle that goes around where clients feel like if I sell my home where can I go, therefore, I’m not going to sell my home.”
Saving for a home could mean cutting down on leisure expenses and sacrificing personal luxuries to put towards down payments and closing costs.
Lenders are encouraging clients to explore their goals and analyze what they’re willing to give up to achieve homeownership.
“The biggest obstacle we see is clients who don’t have the money saved up,” Khaireddine said.
“What’s nice about what’s currently on the market today is there a whole bevy of scenarios that can help clients such as lower down payments, such as what we do with our down payment assistance grants, what we do with our closing costs, grants that really help pay for non-reoccurring costs, so it really alleviates the pressure in some cases.”
First-time home buyers may have the biggest advantage with special programs and grants in place, which could be especially beneficial for millennials.READ MORE: 'These Cases Are Not Over': Michigan Solicitor General Reacts To Court's Ruling In Flint Water Crisis Indictments
“We have first-time homebuyer programs that are as little as three percent down,” Khaireddine explained.
“We have our down payment assistance program that basically can get up to 3% in $10,000 of the purchase price towards qualified clients for prospective homes.”
Bank of America’s 2022 Homebuyer’s Insight Report shows homes are being snatched off the market, limiting inventory.
The report shows that 65% of potential buyers are ready to make offers within three days of viewing a home.
Another 20 percent are ready to make offers immediately.
“We advise them to really get into the marketplace, look,” Khaireddine said.
“With the shortage of supplies, some things you do have to take into consideration. Maybe not be as picky, maybe a slightly more aggressive but for the most part, it’s really based on a case-by-case analysis and what the client’s looking for and what the client’s current situation is.”MORE NEWS: Here Are Ways To Save While On Vacation
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