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Homeowners to benefit in 2016 [Video]

Posted on Monday, December 14, 2015 at 2:38:49 PM

Next year's housing market won't put up the blockbuster numbers 2015's did, but the end result will favor potential homebuyers. According to Redfin, housing prices and sales won't stop growing in 2016, but they will do so more slowly. That's good news for buyers, the company found, as some have been priced out of the market in the last several months. Sales will expand at about half the pace they did this year, while prices rise at about 3.5 percent, which is more in line with normal expectations.

The great news for buyers, however, is that obtaining residential financing will be much easier in the new year. Measures of credit worthiness are evolving as lenders adjust to the new market. Credit scores will now be determined with criteria like a person's utility payments and rental history.

At the same time, a greater number of loans will allow applicants to include income generated from renting rooms to family members for consideration. A bill recently introduced in the House of Representatives would let Fannie Mae and Freddie Mac consider alternative credit-scoring models rather than the traditional FICO credit score. According to Housing Wire, the bill would go a long way toward expanding the number of potential homebuyers in the near future. 

These adjustments would also help negate the impact of the Federal Reserve rate hike.