While mortgage rates have been rising and the housing market threatens to slow down once again, there is still some hope for homebuyers, brokers, and agents. The answer to this problem could be housing bonds. Housing bonds could keep the market afloat.
Within recent weeks, we’ve seen mortgage rates rise over 4%, the highest they’ve been in over a year. Although mortgage rates are on the rise, there is no need for concern quite yet. For one, it’s likely that we will see a short boost in home sales. This is due to the fact that many homebuyers and owners who have been waiting to buy or refinance until they can get the perfect mortgage rate may decide that now is their last chance to do so before rates increase any higher. This is not the only activity which we should keep our eyes on though; housing bonds will also play a significant role in keeping the housing market afloat.
Although many consumers cannot directly invest in housing bonds, some homebuyers are still able to benefit from these bonds. Many state housing finance companies use the income received from these bonds to reduce mortgage rates for qualified buyers with low to moderate incomes. For those who qualify, these breaks can reduce rates down to as low as 1% in some states.
The rental market is also impacted by these state housing finance agencies. Using tax credit money, the federal program known as the Low Income Housing Tax Credit has helped in the construction of many reasonably priced multi-family homes. This program has helped provide much needed homes for those who cannot afford to buy or rent a house normally.
While these benefits may only be available to those with lower incomes, housing bonds will be an essential step in keeping the housing market up for everyone, and ensuring that we do not see another crisis which began only a few years ago.
To find out more about the housing bond process click here: