Heading into 2021, housing market experts are predicting a year of high demand and rising home prices. After an initial drop in housing market activity last spring coinciding with stay-at-home orders and closed businesses, home buying and selling rebounded quickly. Buyers are still eager to move, but the lesser supply of homes on the market in many parts of the U.S. is contributing to rising home prices. As a result, it remains a seller’s market that benefits homeowners who are choosing to sell now.
Buying or Selling a House This Year
It’s true that the pandemic outbreak caused many buyers and sellers to hit pause on their housing plans in 2020. In fact, existing home sales dropped to their lowest point of the year during what’s usually the hottest time for real estate.
On the bright side, it was only a temporary drop. By the end of 2020, there was such a surge of home sales that it more than made up for the number of losses during the spring. Crazy, right? It was probably thanks to real estate agents learning how to practice social distancing guidelines, which eased buyer and seller worries. And now, the housing market forecast shows no sign of home sales slowing down in 2021.
If you’re determined to buy or sell a home this year, there’s a really good chance you can make it happen.
Home Prices during COVID-19
Let’s get right down to it. While some might have expected home prices to drop in the wake of the coronavirus, that hasn’t been the case. While the low rates are promising for an affordable mortgage, there are not enough properties on the market compared to the number of shopping buyers. Expect rising home prices to balance out low rates.
So, whether you’re buying or selling, it seems like prices are holding steady. But there’s still a lot that can happen, especially in different areas of the market.
Getting a Mortgage in 2021
The good news for home buyers right now is mortgages are being offered at rock-bottom interest rates. Even before the first known coronavirus cases in the U.S., economists and real estate professionals predicted mortgage interest rates would remain, on average, below 4% for the majority of 2020. The impact of the pandemic has lowered interest rates even further and drawn out that prediction into 2021 as well.
But keep in mind, dozens of factors go into how a lender decides what interest rate you qualify for—there are no guarantees. At the height of the pandemic, some lenders raised their down payment and job history requirements. That’s why you might’ve heard how some buyers were pulling teeth just to get approved last year. Lenders had to be extra careful to avoid taking on too much risk.
In fact, some lenders might still request proof of a buyer’s job security as late as one day before closing so they can cancel financing if the risk is too high.
Don’t let a strict lending requirement get you down—it isn’t necessarily a bad thing. Sure, you might want to buy a house ASAP, but if your job and income aren’t stable, you still have debt, or you don’t have a down payment of at least 10–20%, buying a house isn’t a good idea—coronavirus or not.
Now that you know what to expect, it is important to reflect on your personal situation to decide whether this will be a good year to buy or sell your house. I do think if that situation is right, now is a safe time to buy and sell your house just as safe as any other year. If you have any real estate questions you might have, you can call me direct at 864-942-8991 and Start Packing.
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