“SINCE HOME PRICES HAVE BEEN RISING FASTER THAN THE COST OF LIVING, ARE WE AT A POINT IN WHICH OWNERSHIP IS OUT OF REACH BECAUSE OF PRICES? ARE PEOPLE BEING PRICED OUT OF THE MARKET?”

Using simple logic, one would be inclined to say yes, but the answer is actually no for two reasons: First, the market is leveling off, and second, lenders are now offering more creative financing options. With the real estate market starting to achieve a balance between buyers and sellers, the dramatic rise in home prices that we’ve seen lately will begin to slow. Granted, prices will still go up, but not nearly as quickly as they have in the past few years. Furthermore, lenders have started offering more non-traditional types of loans to combat escalating prices. While the 30-year fixed-rate mortgage used to be the only loan offered, today prospective homeowners have several choices including the now-common adjustable-rate mortgage (ARM), the option ARM (in which a borrower can decide how much to pay—from interest-only up to a full principle and interest payment), and the very popular interest-only mortgage. Almost all lenders have variations on these types of loans to help prospective borrowers buy a home—without taking on an unmanageable amount of debt. Although it has been difficult for some prospective homebuyers in the past few years, the future does look much brighter. ∆