Did you hold off from buying a home in 2020? It was a year filled with stress and uncertainty. The COVID-19 pandemic created a huge economic crisis across industries, causing many people to worry about their own financial future. In the meantime, many housing markets remained red hot with high prices and homes selling in only one or two days! Some felt as though the world was just a little bit too unstable to move. With the arrival of vaccines and the end of the pandemic hopefully approaching, many buyers are turning their attention to the new year. Here is some information about the 2021 housing market.
2021 Mortgage Rates
The two biggest things most potential buyers are searching for is the mortgage rates and home prices. After all, these are the two factors that will ultimately have the biggest impact on your finances.
Mortgage rates fell to historic lows in 2020. The average rate for a 30-year fixed loan bottomed out at 2.67% in December. The average for the year was actually 3.125%. So where do we go in the new year? NerdWallet predicts the average will actually fall further to around 3.075% for 2021. Other forecasts aren’t so optimistic. But when you consider the average was 8.05% in 2000 and 4.69% in 2010, those are still very friendly rates.
2021 Housing Prices
As for housing prices, unfortunately for buyers, the housing market forecast for 2021 looks to be a seller’s market. Housing prices are expected to continue to climb in many parts of the country! Overall, median housing prices are projected to increase anywhere from 2.7% to 5.7%. That’s a significant jump to take into account as you try to determine how much house you can afford. However, when you look at the entire life of the loan, the low interest rate may make up for the slightly higher purchase price. You may want to consider the complete financial picture to determine if now is the best time to buy.
It’s important to note that there is no single housing market. Conditions can vary significantly from state to state, city to city and even neighborhood to neighborhood. So, make sure to work with an experienced agent who can help you navigate the local market. If you are looking for an agent in your area who can help you find the right home for the right price, consider signing up for Heroes San Diego. We are now nationwide!
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Continue reading for more information about the 2021 housing market
A Different Home Buying Experience
While we all can’t wait to get “back to normal,” the experience of home buying in the rest of 2021 will still be a little different than it was before the pandemic. For one, you may see more virtual home tours instead of traditional open houses. Many agents have transitioned to virtually showing homes, so you still get a good home buying experience.
Many lenders and agents may prefer to conduct virtual meetings as you go through the home buying process. This may be especially true of large lending companies who may have their staff working from home. This may also mean you need to sign and send documents online using a secure document transfer system. Your agent or lender will be knowledgable with how these programs work. They should be able to walk you through the process if you have never used one before.
Expected 2021 housing market trends to keep your eye on:
Suburbs Stay Hot
The pandemic pushed many buyers to seek out more space for themselves and their families. Due to this, there was an increase in interest in suburban homes that typically offer more square footage on larger lots. This trend is expected to continue in 2021, so be prepared for more competition if you are looking to buy in these areas.
New Home Construction Takes Off
New home construction had a major resurgence in the fall of 2020. This means there will be an influx of new homes available during the spring and summer buying seasons. Over the past few years, there has been more demand for housing than supply. So, you can still expect significant competition for these homes.
Impact of Evictions
When the pandemic hit, the CDC put a moratorium on evictions, hoping to help people unable to make rent. But that moratorium is only proposed to be extended to March 31, 2021, meaning millions of people could soon be evicted from their rental properties.
If landlords are unable to find new renters quickly, they may be more likely to put homes on the market. This would lead to an influx of new available properties. It remains to be seen exactly what effect the expected wave of evictions will have on the housing market, but it is something to pay attention to nonetheless.
Do Your Research
Looking at the 2021 housing market forecast, it may appear at first to be a bad time for buyers. But sale price is only one of the many factors to consider when looking to buy a home. Honestly, the deal you get will be more about your individual circumstances and the specific property you want.
Home buying in 2021 will certainly have some pros and cons. If you do your research and work with an experienced agent that you can trust (Heroes San Diego), you will find the home of your dreams!
Webinars & Seminars
Heroes San Diego works closely with all Heroes! Veterans and military personnel, law enforcement, teachers, firefighters, healthcare workers-you name it! Our webinars and seminars are free, and you will be provided information based on which type of hero you are.
Each hero has different benefits, and we work closely with you to take advantage of those benefits! Not only this, but you will learn everything from start to finish on purchasing a home. Heroes SD will be by your side the entire time, ensuring everything runs smoothly.
Too many times has Owner and Founder of Heroes San Diego Johnny Perez seen heroes be misguided. There is a lot of misinformation out there, and people looking to take advantage of you. We simply do this to give a huge THANK YOU back to our Heroes.
We hope our information about the 2021 housing market was useful!
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