Happy 2021! This year will be an especially cheerful one if you’re in the market for a new home, as housing market experts are predicting a boom. Below I’ve collected insights and tips that may help you get into a new house this New Year.
Insight #1: Timing
According to an examination of market trends, home prices are projected to rise throughout the year. If we take the average of the forecasts from Fannie Mae, Freddie Mac, the National Association of Realtors, and the Mortgage Bankers Association, prices of existing homes are expected to increase 3.1% in 2021.
While these factors create a sense of urgency to buy, it is important to take a step back and assess your situation. The optimal time to buy a home solely depends on what makes the most sense for you and your family. This is an important financial decision that should not be rushed into.
Insight #2: Demand
As a buyer in 2021, it’s important to consider that the lesser supply of homes on the market is contributing to rising home prices. As a result, 2021 looks like it will remain a seller’s market that benefits homeowners who are choosing to sell now.
Low inventory means you need to be on your toes when you go house hunting. The best homes will likely have multiple offers, which doesn’t leave much time to mull things over. If you want to find a good home in this market, here’s some advice:
· You can’t always get what you want. It’s likely that you will need to compromise on your vision. Be willing to give up some “nice-to-haves” for your “must-haves.” You may also need to think outside the box and find a home you can upgrade over time.
· Keep searchin’. It may also be the case that the location where you’re planning to buy is too competitive. Expand your search to surrounding neighborhoods. You might be surprised at the gem you can find. Working with a real estate agent who really knows the area is the best way to find a home that fits your budget and lifestyle.
· Straight to the bank. Getting pre-approved for a mortgage before you go house hunting is a must in any market. But in a market with such a limited home supply, not doing this legwork ahead of time gives a pre-approved buyer free reign to swipe the home you want right out of your hands.
· Money, money, money. Putting more money down will help you qualify for a lower mortgage rate and will decrease your monthly payment. It also gives sellers more confidence that your loan will close, which may increase your chances of getting an offer accepted.
Insight #3: Lending
Some lenders raised their credit score requirements amid the economic fallout from the pandemic. Near the end of 2020, credit availability was 30% under pre-pandemic levels, according to the Mortgage Bankers Association. There is some buzz that lenders may loosen credit requirements if the economy improves this year, but it may still be hard to find a lender if you have a lower credit score.
If you sat out on home buying in 2020 to wait for a clearer picture of the housing market to emerge, you may have noticed the prevalent theme of low interest rates. The industry’s major players all expect mortgage rates to stay in the low 3% range come 2021. The Mortgage Bankers Association predicts the year will start off at a 3.1% average rate for 30-year loans, while Fannie Mae expects an even lower 2.8%. Freddie Mac projects a 3% average across the entire year.
Even though rates are generally low, it's still important to shop around for a mortgage. The rate you're offered will depend on the lender and your financial circumstances. Contact multiple lenders to compare mortgage rates and fees, and choose the best deal you're offered.
Insight #4: A Note for Sellers
You may be encouraged to put your house up for sale to take advantage of the current demand. That’s great! Remember, though, that the most important thing a seller can do is price their listing correctly right out of the gate. That’s why it is crucial to work with an agent who you trust and who has their finger on the pulse of every market shift. Understanding the current market is key to correctly pricing your listing, and correctly pricing your listing is key to a successful sale.
A Helping Hand
Whether you’re a home buyer or seller, it’s important to have a savvy real estate agent on your side. From finding the best location and property to negotiating the best purchase price and terms, this person’s primary role is to have your best interests in mind.
Your real estate agent can save you time, effort, and money when you are buying or selling your home. It makes sense to rely on the experience and training of a real estate agent to create the best possible experience from both a personal and financial point of view as you begin this new and exciting chapter in your life.
If you’re interested in learning more about the Vero Beach housing and rental markets, reach out to Colleen Rodriguez at (954) 804-6804 or email@example.com. She is always available to chat and offers up sound advice that isn’t stuffy or filled with jargon, which is as refreshing as a swim in Jaycee Beach.