The real estate market is constantly changing: inventory fluctuations, eligibility criteria and, of course, interest rates. Sometimes there aren’t many homes available for purchase, and other times the inventory is plentiful. Depending on the situation, it’s either a buyer’s market or a seller’s market.
Although all of these constantly changing variables may seem a little frustrating, they also create unique opportunities. As you can see, whether you want to buy a home to reside in or buy one as an investment, being aware of trends in the market will help you figure out when it is best for you to make your move.
If you are a potential home-buyer, this year’s buying trends can help you determine whether to buy a home now or wait. If you find favorable trends, you can move on to other tasks, such as hiring a real estate agent, physically visiting different properties and finding affordable home insurance.
It is expected that the pandemic, along with the new democratic president and administration, will boost the real estate market to some extent. Therefore, knowing the current trends when buying a home can give you a definite advantage or save you from making a big and costly mistake.
There are currently more buyers than homes available. This creates a challenge. You want to evaluate a particular property before making an offer, but you don’t have the luxury of time. People choose the best homes quickly, which means you have to be quick or lose.
You have a few ways around this. Start by making a list of the things you need to have versus the things you want. Remember that you can always make changes to your new home after you move in. And instead of focusing on one place, consider expanding your area of search. Sometimes even a 5 miles radius can make a huge difference in the number of homes available for sale.
Before you start making offers make sure you are already preapproved for a loan. This gives you a significant advantage over other buyers.
Rising Real Estate Prices
As this is a seller’s market, prices will not drop any time soon. In November alone, the price of existing homes increased by 15 per cent compared to the previous year. For sellers, this means that they will get the asking price or, if a war breaks out between many buyers, even more. As a potential buyer, you must first determine how much of a mortgage you can easily afford.
As a general rule, your household allowance should not exceed 25% of your net monthly income. Also, if you want to get ahead of another buyer for a particular home and get pre-approved, try to have at least a 15-20% down payment which will reduce your mortgage payments.
Interest rates remain low
Current and projected 2021 mortgage rates are ridiculously low. Last summer, people couldn’t believe that interest rates had dropped to 3.5%. But by November, they had fallen again, to 2.31% for 15-year fixed rate mortgages. Although interest rates have fluctuated a bit, experts think they will stay around 3 per cent for the rest of the year.
An important note: don’t get caught up in the hype about interest rates. Yes, as a homebuyer, this is great news. However, the most important thing when buying a home is to make sure that you can afford to pay your monthly mortgage payments.
Online Real Estate Boom
While real estate agents regularly sell homes in person, they are nowadays s pending more and more time marketing and selling homes online. Today, both small and large real estate companies are using the Internet.
Having access to real estate online makes the process much easier. At least in the beginning, you can see photos and read a full description of each property you’re interested in.
Different schemes to help you own a home
One option is to rent a home in order to buy it. Rent-to-own deals are not new, but they are expected to gain popularity in 2021. The main advantage is that you have time to save for a down payment. Depending on the deal, you may have 3 years or more to clean up your credit and get ready to get a mortgage.
Especially when it comes to real estate, the more knowledge you have, the better off you’ll be in the long run. So, keeping up with home buying trends can prove very beneficial to you. Some people worry about a market crash similar to what happened in 2008 and 2009. However, experts do not believe this will happen.