You May Be Closer to Homeownership Than You Think!
Navigating Housing Affordability in the 2025 Residential Real Estate Market
As we move into 2025, housing affordability remains a hot topic for potential homebuyers. With shifting market dynamics, economic fluctuations, and evolving consumer preferences, understanding how to navigate the current landscape is crucial for anyone looking to buy a home this year and in the future.
The Current State of the Market
The 2025 housing market has seen a mix of challenges and opportunities. On one hand, interest rates have stabilized after the volatility of the past few years, providing some relief to buyers.
Housing prices in many areas remain high and inflationary pressures have impacted the cost of living, making it more challenging for buyers to save for down payments and manage prospective mortgage payments.
Exploring Down Payment Assistance Options
Before you start shopping for homes, getting pre-qualified with a lender before purchasing a home is crucial as it provides a clear understanding of your budget and strengthens your position as a serious buyer. This process not only helps streamline your home search but also gives you a competitive edge in negotiations, demonstrating to sellers that you have the financial backing to close the deal.
Whether you are a first-time home buyer or a current homeowner looking to move up, there are 3 amazing down payment assistance options available for purchasing real estate in North Carolina.
Down Payment Assistance in North Carolina
NC Home Advantage Mortgage™ offers down payment assistance up to 3% of the loan amount that can help first-time and move-up buyers get into a new home.
IMPORTANT TO NOTE - Repayment for all of NCFHA down payment options is required ONLY if you sell, refinance or transfer your home before year 15—the down payment assistance is forgiven at 20% per year at the end of years 11–15, with complete forgiveness at the end of year 15.
First-Time Home Buyer Assistance in North Carolina
NC 1st Home Advantage Down Payment offers $15,000 in down payment for new buyers - first-time buyers (those who have not owned a home as their principal residence in the past three years) and military veterans.
IMPORTANT TO NOTE - Repayment for all of NCFHA down payment options is required ONLY if you sell, refinance or transfer your home before year 15—the down payment assistance is forgiven at 20% per year at the end of years 11–15, with complete forgiveness at the end of year 15.
Community Partners Loan Pool (CPLP)
CPLP is the Agency’s most generous down payment assistance program for eligible low- and moderate-income home buyers. Borrowers can receive up to 25% of the sales price or a maximum loan of $50,000, whichever is less. Must be combined with an NC Home Advantage Mortgage™ or a USDA Section 502 Direct loan.
Borrowers must complete six hours of home buyer education as well as two hours of one-on-one in-person pre-purchase counseling provided by a HUD-approved housing counseling agency. Classes are planned once per month on Saturday from 8:30 am to 4:00 pm, cost $50, and will be held online via zoom. To sign up for the class please go to Consumer Education Services Inc. website and 📌 sign up for the NCHFA Housing Workshop class.
IMPORTANT TO NOTE - Repayment for all of NCFHA down payment options is required ONLY if you sell, refinance or transfer your home before year 15—the down payment assistance is forgiven at 20% per year at the end of years 11–15, with complete forgiveness at the end of year 15.
Neighborhood Assistance Corporation of America (NACA)
The NACA homeownership program provides a below-market rate and an affordable mortgage through their financial counseling programs for eligible borrows. If eligible you would be able to qualify to purchase a home with No down payment, No closing costs, No hidden fees, No mortgage insurance, while also receiving a competitive interest rate!
Like NCHFA CPLC, you must 📌 sign up for the NACA Housing Workshop class prior to receiving counseling and getting the home buying process started. The initial class is an online self paced course and is free.
IMPORTANT TO NOTE - You must occupy the home for as long as you have the NACA Mortgage. Therefore, NACA puts a lien, a Neighborhood Stabilization Payment (“NSP”), on the property – in addition to other enforcement mechanisms – to ensure you live in the home. The NSP is initially $25,000 and then is reduced by $5,000 after each full year the Member has the NACA Mortgage. If you violate this requirement by not living in the home while you still have a NACA Mortgage, NACA will have the right to demand payment of $25,000 and foreclose on your property. If at some point you decide to sell or refinance the home, you will need to contact NACA to obtain a release of the lien. NACA will provide a lien release without any charge to you if you have complied with all NACA requirements.
Credit Unions
Local credit unions often offer highly competitive homeownership programs often with below-market interest rate and with extremely low or no downpayment required for eligible borrows and/or their customers. If eligible you could potentially qualify to purchase a home with Low or No down payment, Low or No closing costs, Low or No mortgage insurance, and highly competitive interest rates!
Summary of Solutions & Strategies for Buyers
Given these challenges, prospective buyers can take the steps listed below to improve their chances of finding an affordable home:
Explore Different Financing Options: First, investigate various mortgage products and the assistance programs mentioned above. Homebuyer programs along with Conventional, FHA, USDA, and VA loans each provide benefits depending on your situation or circumstances.
Get Pre-Approved for a Mortgage: Understanding what you can afford is crucial. A pre-approval not only gives you a clear budget but also makes you a more attractive buyer to sellers.
Hire a Real Estate Agent to Represent You: Working with a skilled real estate agent like me who knows the local community well, can help you find properties that might be priced below market value, can navigate offer/contract negotiations, can protect you from overpaying, and advise you of your options and rights as a buyer.
Consider Different Locations: Flexibility in location can open up more affordable options. Suburbs and smaller towns often offer lower prices compared to major urban centers.
Prioritize Needs vs. Wants: Be clear about your must-haves versus nice-to-haves. Focusing on essential features can expand your pool of potential homes.
Long-Term Considerations
When buying a home, it's important to think like an investor or long-term. Consider factors such as the potential for property value appreciation, the stability of the neighborhood, and your personal and financial goals. Buying a home is not just about current affordability but also about building wealth and future sustainability.
Conclusion
The 2024 housing market presents both challenges and opportunities for buyers concerned with affordability. By staying informed about market trends, exploring various financing options, and being strategic in your approach, you can navigate this complex landscape more effectively. Remember, patience and preparation are key. With the right strategies, your dream of homeownership can become a reality.
I’m always here to help you every step of the way on your home buying journey. Happy house hunting!
