The home buying process can be difficult to navigate, and the current market has made it uniquely difficult for buyers. Interest rates at record low levels in the past one year fueled demand. But this demand, combined with low housing supply during the coronavirus pandemic, has created a housing boom.
If you’re preparing to buy or sell a home soon, it’s important to know what’s ahead of you, so we’re sharing some of the housing market trends and summer housing market predictions you can expect to see this year. can do.
And if you’re just starting the home buying process, Travel Reliable for comparing rates and lenders and figuring out your mortgage options.
Mortgage rates are rising, but they will remain relatively low
One of the most significant effects of the pandemic’s economic recovery on the housing market is lower interest rates. In March 2020, the Fed cut interest rates, pushing mortgage rates to their lowest levels. They have remained at historic lows over the past year.
That being said, mortgage rates are on the rise. And while the increase may be relatively small, it can still make an interest difference of tens of thousands of dollars over the course of your loan.
While current low mortgage rates are rising slightly now, this is not the first time in the past year. As a result, it is difficult to know whether this trend will continue. That being said, rates are still low compared to pre-pandemic levels.
To see what rates you may be eligible for, Travel Reliable for comparing lenders and mortgage rates.
As mortgage rates rise, will the real estate market calm down?
Demand still high, home prices rising even higher
High demand from home buyers and limited inventory of homes in the market has created a perfect storm for price hike. According to Zillow, US home values have risen 11.6% Nearly the same increase is expected over the past year, and in the summer months and the coming year.
Unfortunately, home appraisals have not been perfectly kept up with high demand, which means that some homes are not paying as much as the agreed purchase price. For example, if you offer $300,000 for a home, but it only appraises for $280,000, you may be forced to pay a $20,000 discrepancy—and that’s against your down payment. is at the top.
With higher home values, thus the owners can take advantage of
Buyers can expect to compete in bidding wars due to limited inventory
Another result of high housing demand and limited inventory is the huge increase in the number of bids on each house. It is not unusual for a home seller to receive dozens of offers within a few days of their home being on the market today. As a result, bidding wars have begun.
These bidding wars have been excellent for sellers, but not as great for buyers. Not only is there more uncertainty about whether an offer will ever be accepted from you, but buyers have to make more concessions.
Homebuyers are offering significantly more money as consumer confidence is eroded, collecting large earnest money, and even waiving appraisal and inspection contingencies.
It is important to know how much you can actually spend and pay attention to this price growth trend. Visit an online mortgage broker such as Credible to see what size mortgage you can get pre-approved for.
The home buying process can take longer than usual
Several factors have come together and the mortgage closure process has become slower than usual. First, the large increase in demand has created more work for mortgage lenders.
Many lenders have also increased their lending standards as a result of facing financial hardship. In an effort to ensure that only qualified buyers are getting loans, lenders have become more strict with their income, employment and loan requirements. As a result, processing each loan can take longer.
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Housing transactions will increase with increased vaccine rollout
As the coronavirus vaccine is being released, people’s lives are returning to normal. The mortgage industry is no exception. Many homeowners have been hesitant to sell their homes for the past one year due to uncertainty.
This summer, we expect more home listings. This could be good news for buyers, as the increase in inventory could help level the playing field a bit.
The housing market – for both buyers and sellers – has been changing rapidly over the past year due to low interest rates, high demand and low housing inventories. When looking at the summer real estate market, we are likely to see a continuation of some of those trends, such as increased demand. But we may also see some trend reverse course, as interest rates start to rise and the vaccine rollout drives up inventory.
These market predictions can be viewed as a nation’s economic growth as the COVID-19 pandemic continues, whether you live in San Francisco or San Diego, San Antonio or Los Angeles, or Las Vegas.
If you think this is the right time to buy a home, it’s time to start preparing. Travel Reliable to get in touch with experienced loan officers and get your mortgage queries answered.
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