This year may just be the best in history for first-time homebuyers to use a low down payment mortgage to leap from renting to owning. 

This year may just be the best in history for first-time homebuyers to use a low down payment mortgage to leap from renting to owning.

Either because they don’t know about low down payments or don’t understand them, thousands of prospective buyers are struggling to save enough money for a 20 percent down payment, which will take an average of 10 years, even longer in expensive markets like San Francisco, Austin and San Diego.

Shortening the time to save for a down payment is just one reason to get into the market now, Here are four others.

Prices are still rising

Leading economists expect prices to continue rise in 2018 at a rate far above average, Fannie Mae forecasts an increase of 5.6 percent this year, and Freddie Mac has prices up 5.7 percent before they flatten out next year as supplies improve.

The faster new buyers close on homes, the more their home values will rise with the tail end of the recovery, and the faster new owners will build equity. There is still room for price growth; only one out of three homes has reached its pre-recession peak.

So are interest rates

Mortgage rates are gradually rising, but they are still historically low.

The Federal Reserve is expected to continue to raise rates this year and perhaps next. The longer first-time buyers wait, the higher their mortgage will likely be.

Rents are too

Rents are still rising, though not as quickly (Zillow forecasts a 1.6 percent increase this year). Slower rent hikes will give renters a little breathing room to save for down payments.

More choices than ever

Although FHA’s 3.5 percent down loans are the most popular option for first-time buyers, there are more options this year than ever before.

Fannie Mae, Freddie Mac and many commercial lenders, including Bank of America and Navy Federal Credit Union offer low down payment mortgages, some as low as 1 percent down.

State and local government housing finance agencies offer 2,507 programs, the largest ever.

Equity from rising home values and savings from not having to pay rising mortgage interest and rising rents will offset the higher monthly payments resulting from low down payment, but first-time buyers must act now before conditions change.

Full disclosure: Steve Cook writes the monthly Down Payment Report for Down Payment Resource.

Steve Cook is a communications consultant and  editor of Real Estate Economy Watch.

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