Interest rates are at a 30-year low, said Alma Parrott, branch manager of McAfee Mortgage in Amarillo, and lenders have relaxed many of the requirements to qualify for a loan. With interest rates as low as they are, that's helped us more than anything. The Federal Reserve cut interest rates three times in a seven-week period late last year. As a result, Parrott said, lenders are offering 30-year conventional loans at 6 percent with no discount points or origination fees. Lenders and the government have both made buying a home more attractive by offering a variety of other incentives, too, Parrott said.
Subprime loans have higher interest rates and require the buyers to put more money down.
Qualified home buyers with few debts can get into a home with only a 3-percent down payment on a conventional loan, which normally requires 5 percent down. Lower interest rates, buyer incentives and a healthy economy have also helped homes sell faster than they did in the late 1980s and early 1990s, said Stephanie Atkinson, a Realtor for Ultra Realtors in Amarillo. When Atkinson became a Realtor, in 1987, the real-estate market in Amarillo was beginning a serious downturn. The number of new homes built in the city dropped to 101 in 1988 and didn't rise above 200 for four years. Homes stayed on the market longer, and sellers dropped their price rather than wait, she said.