(CBS DETROIT) – A tight housing market could mean higher costs for homebuyers looking to move to the Detroit metro area.
According to Bank of America, home prices are up 11% from a year ago.
READ MORE: As COVID cases rise in southeast Michigan, city of Detroit now offers testing program to treat
“We are seeing a lot of people who are currently living in homes, but there is trepidation to sell based on the fact that there is such a lack of inventory,” said Michael Khaireddine, vice president of the leader of the BOA loan market.
“It’s this circle that goes around where customers feel like I’m selling my house where can I go, so, I’m not going to sell my house.”
Saving for a home could mean cutting back on leisure expenses and sacrificing personal luxuries to spend on down payments and closing costs.
Lenders encourage clients to explore their goals and analyze what they are willing to give up to access home ownership.
“The biggest hurdle we see is customers who don’t have cash on hand,” Khaireddine said.
“The good thing about what’s in the market today is that there are a whole range of scenarios that can help customers, such as lower down payments, like what we’re doing with our grants down payment assistance, which we do with our closing costs, grants that really help with non-recurring costs, so that really takes the pressure off in some cases.
First-time home buyers may have the biggest advantage with special programs and subsidies in place, which could be especially beneficial for millennials.
READ MORE: Abbott says deal reached to reopen infant formula factory
“We have programs for first-time home buyers who are only three percent down,” Khaireddine explained.
“We have our down payment assistance program which can essentially get up to 3% on $10,000 of the purchase price for qualified customers for potential homes.”
Bank of America’s 2022 Homebuyer Information Report shows homes being taken off the market, limiting inventory.
The report shows that 65% of potential buyers are ready to make offers within three days of viewing a home.
Another 20% are ready to make offers immediately.
“We advise them to really enter the market, look,” Khaireddine said.
“With the shortage of supplies, certain things must be taken into account. Maybe not as picky, maybe a little more aggressive, but for the most part it’s really based on a case-by-case analysis and what the client is looking for and what their current situation is.
NO MORE NEWS: Michigan gas prices hit new high of $4.38
© 2022 CBS Broadcasting Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.