The most & least competitive housing markets in 2019

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Although the national housing market has recently begun to cool off, there are still many places in the United States where markets remain highly competitive.

LendingTree, the nation’s leading online loan marketplace, ordered the 50 largest metropolitan areas in the United States based on an average of the city’s rank in three categories that contribute to the competitiveness of home buyers in an area:

  • Share of buyers shopping for a mortgage before identifying the house they want
  • Average down payment percentage
  • Percentage of buyers who have good or excellent credit (above 680)

These criteria were chosen because the average American cannot afford to pay cash for a home — this means that most Americans need good credit to secure a loan, and enough cash to be able to make a substantial down payment. A more competitive buyer has higher credit and the ability to put down larger down payments.

Image Credit: DepositPhotos.com.

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Key findings

The average down payment percent in the top 10 most competitive metros is 16%, two points higher than the average down payment percent found across all the cities looked at in this study. As the housing market cools, this number may fall somewhat, as sellers and lenders accommodate more potential buyers.

Image Credit: DepositPhotos.com.

The 5 most competitive housing markets

63% of buyers in the 10 most competitive metros shopped around for a mortgage before settling on a house.Shopping around for a mortgage can not only help buyers save money — it can also help them become pre-approved for a mortgage, which makes it easier to purchase a home.

57% of buyers in the 10 most competitive metros have good or excellent credit. Across the 50 largest metros in the country, that number is only 49%. People who live in more competitive areas should make sure that they carefully monitor and maintain their credit scores.

Image Credit: DepositPhotos.com.

5. San Jose, California

Share of buyers who shopped for a mortgage before settling on a house: 61%
Share of buyers with good or excellent credit: 65%

Average down payment: 19%

Image Credit: Sundry Photography/shutterstock.

4. San Francisco

Share of buyers who shopped for a mortgage before settling on a house: 62%
Share of buyers with good or excellent credit: 59%

Average down payment: 17%

Image Credit: .

3. Portland, Oregon

Share of buyers who shopped for a mortgage before settling on a house: 65%

Share of buyers with good or excellent credit: 57%
Average down payment: 15%

Image Credit: 4nadia/istockphoto.

2. Los Angeles

Share of buyers who shopped for a mortgage before settling on a house: 64%
Share of buyers with good or excellent credit: 55%

Average down payment: 17%

Image Credit: ViewApart/istockphoto.

1. Denver

Share of buyers who shopped for a mortgage before settling on a house: 67%
Share of buyers with good or excellent credit: 56%

Average down payment: 16%

Image Credit: milehightraveler/istockphoto.

The 5 least-competitive housing markets

Living in a less competitive market can be beneficial for buyers as it means that the path to homeownership is less challenging than it is in other parts of the country. For example, in the three least competitive areas, only 43% of mortgage shoppers had prime credit, compared to an average of 49% across the 50 largest metros in the United States.

Image Credit: DepositPhotos.com.

5. Salt Lake City

Share of buyers who shopped for a mortgage before settling on a house: 59%
Share of buyers with good or excellent credit: 46%

Average down payment: 12%

Image Credit: strickke/istockphoto.

4. New Orleans

Share of buyers who shopped for a mortgage before settling on a house: 59%
Share of buyers with good or excellent credit: 39%

Average down payment: 14%

Image Credit: Sean Pavone/istockphoto.

3. Pittsburgh

Share of buyers who shopped for a mortgage before settling on a house: 55%
Share of buyers with good or excellent credit: 45%

Average down payment: 13%

Image Credit: HaizhanZheng/istockphoto.

2. Virginia Beach, Virginia

Share of buyers who shopped for a mortgage before settling on a house: 58%
Share of buyers with good or excellent credit: 47%

Average down payment: 12%

Image Credit: DenisTangneyJr/istockphoto.

1. Birmingham, Alabama

Share of buyers who shopped for a mortgage before settling on a house: 59%
Share of buyers with good or excellent credit: 36%

Average down payment: 12%

Image Credit: Sean Pavone/istockphoto.

How to shop smarter in a competitive real estate market

Regardless of the level of competition in your area, being a well-prepared buyer increases your odds of securing that dream home. Use the following tips to make your offer stand out:

Image Credit: DepositPhotos.com.

Shop for a mortgage before you shop for a house

The most significant of our three variables is having financing in place before anything else. Not only does this give you time to compare mortgage offers from several lenders and choose the best terms for your needs, but if you show up at the negotiating table with an offer of financing already in place, you’re giving yourself an edge over the competition. In some cases, shopping around for the lowest rate on a mortgage can help you save tens of thousands of dollars over the lifetime of your loan.

A good place to start planning is on LendingTree’s marketplace, where you can fill out a short online form and potentially get quotes from several lenders.

Image Credit: depositphotos.com.

Improve your credit score

Credit scores don’t just determine if you will get approved for a mortgage. They also have a big impact on the rate and fees you’ll pay, and that adds up to tens of thousands of dollars on a mortgage. Find out what credit score you need to get a mortgage.

Image Credit: PeopleImages.

Save a larger down payment

Lenders view the down payment as your “skin in the game,” so a larger amount saved increases your financing options. If you do not have a large amount already saved, there are programs in place to assist borrowers.

Image Credit: DepositPhotos.com.

Be patient

Improving your credit score and saving for a larger down payment may take some time. So, if you are a buyer with a lower down payment amount or non-prime credit, find a lender to pre-approve your mortgage and level the playing field so you can compete regardless of being in the hottest or most accessible housing markets in America.

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

Image Credit: Marcin Wiklik / iStock.

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