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Who will this hurt the most? According to Wegner, homeowners who have second mortgages are sure to feel the pinch. He says it will also be felt in terms of auto loans and credit card rates.
Still he believes the housing market will remain strong. “Right now the home ownership rate in America is 63% and that is the lowest since 1967. So that means there is a lot of room for growth.”
In 2015, the average home value went up 6 ½ % Wegner says. As home values hold, he believes people will continue to try to get in.
“Boomerang buyers are coming out in full force,” Wegner says referring to buyers who had a catastrophic credit event in their past and are now looking to get back in the housing game. “These are people who got the recession behind them, they’ve dusted themselves off and they want to re enter the housing market. They know it’s a good deal and rates are still good.”
“Programs expand the buyer pool. You want to increase housing, you allow more people to buy homes,” Wegner says.
On December 12th Fannie May released a new program called the Home Ready. It focuses on “creditworthy, low-to-moderate-income borrowers” with expanded eligibility and focus on financing homes in “designated low-income, minority, and disaster-impacted communities.”
Is owning a home still the American Dream? Wegner says he isn’t so sure. But for those who have a steady job and paycheck, he says, buying a house is the best financial move you can make.
“Take control of your life and make solid decisions,” Wegner says. “I can tell you 10 bad stories but I can also tell you 100 great stories.”