SUMMARY: With price changes, home inventory and interest rate adjustments, navigating the current state of the housing market can be unnerving. But purchasing a new home is doable.

In the last two years, the housing market hit record highs and then reset almost as quickly. Many economic and infrastructural indicators have helped get us to this unpredictable place.

Interest rates: Hoping to tame economic uncertainty and offset rising inflation, the Federal Reserve boosted interest rates several times in recent months. And, while home sales have declined, the overall supply of homes available has increased, leading to a still-competitive housing market.

Workforce habits: Local homebuying trends continue to vary across the country. But as you would expect, major metropolitan locations and areas popular with the country’s new remote-working population remain stubbornly expensive and at times challenging markets.

Rental properties: At the same time housing prices increased, soaring rental prices continue to prompt interest in investment property.

With buyers facing increasing financial pressure and interest in the once red-hot housing space cooling in general, how can shoppers navigate an increasingly unpredictable homebuying market? And with a historic sellers’ market possibly transforming into a buyers’ market, first-time homebuyers are learning about additional requirements to qualify for home.

Bottom line: It would be in your best interest to keep a close eye on what happens over the next few months. With big changes anticipated to impact the housing market here shortly – many of which may play in your favor – a few simple shifts in real estate strategy and financial planning could serve you well.

Here’s how you can take advantage:

• Lock in a mortgage rate now to lower costs and safeguard against interest rates going up in the future.
  
  
• Save money longer and put a larger down payment on your home purchase. You’ll borrow less and lower your monthly fees.
  
  
• Move to a nearby town or suburb versus a larger city. City housing markets have significantly higher home prices and monthly mortgage expenses in exchange for a minimal commute.
  
  
• Look at properties that have been on the market for 30 to 60 days or more. These sellers are motivated to adjust their pricing or selling terms.
  
  
• Wait a season to purchase a property. During the fall and winter, there are fewer buyers and sellers tend to offer better pricing and discounts.
  
  
• Apply for unique loan types tailored to your individual financial and living situation. It may help you secure alternate forms of financing that can help you stretch your budget further.

Home loan and refinancing options to explore

Fixed Rate – A conventional mortgage that maintains its original (fixed) interest rate for the entire 15-year or 30-year term of the loan. Typically secured with a 20% down payment.

Adjustable Rate Mortgage (ARM) – A more flexible loan type that offers a lower monthly fixed payment for a preset number of years. Afterward, it adjusts to a potentially lower or higher interest rate, depending on current market terms after this initial period expires.

Jumbo Loans – Used if the purchase price of your home exceeds conventional loan limits ($806,500). Please note: This can be higher in certain counties with significantly higher median home prices. Updated 12/13/2024.

Refinance – Allows you to buy out an old mortgage (e.g. from another lender) and secure a better rate or extended repayment period by applying for a new one.

Cash-Out Refinance – Leverages equity in your house to let you consolidate high-interest debt to a lower rate or perform home improvements.

80-10-10 Loan – Provides a way to buy a new home with less than a 20% down payment while avoiding private mortgage insurance (PMI) fees. You pay 10% down, then obtain a mortgage for 80% of the new home’s asking price, and a second for the remaining 10%.

Modification – Already have an existing American Airlines Credit Union home loan? For a small fee, it’s possible to explore interest rate or loan program changes.

Home Equity Line of Credit (HELOC) – Lets you borrow against current home equity to invest in a new property or home improvements and repay this money over an extended period. The Credit Union also offers an unprecedented, fixed-rate HELOC option.

Unique Loans – The Credit Union also offers access to a variety of unique loans, including those that provide special offers for first-time homebuyers, or those seeking investment properties or vacation homes.

Please note: American Airlines Federal Credit Union offers a number of products to help you finance your home. Find the best lending option for you today.