The housing market this year is unlike any we’ve ever seen. So, if you’re thinking about buying, it’s smart to do a little digging. Use these helpful guidelines to determine if you should start home-shopping now or wait until summer.
4 things every homebuyer needs to know about this spring’s housing market
Maybe you’re a renter who wants to start building something permanent (in the form of home equity that’s been growing at an astonishing rate). Or perhaps you already own a house and are ready to swap out your starter for your family’s forever place.
Even with the economic changes of 2020, market factors show there’s no need to put your dreams on hold. In fact, the latest report from ShowingTime, a supplier of real estate showing management technology, found that winter homebuyers never hibernated, showing instead a 49.5-percent year-over-year traffic increase. Springtime buyer activity is expected to climb even higher.
In a market this hot, there are many advantages to buying now instead of later:
1. Housing prices will keep going up.
Based on CoreLogic’s latest U.S. Home Price Insights report, housing prices have appreciated 10 percent in the last 12 months alone. And, the report projects that home prices will not drop but should continue to increase by more than 3 percent.
Some housing experts say home prices may rise more than that — as much as a 5.7-percent increase. If you’re ready to buy a home, it may cost more to wait.
Click here to connect with a local loan officer who knows the ins and outs of today’s market and can help you close fast.
2. Mortgage rates are currently low.
They’ve hit multiple record lows, with Freddie Mac’s Primary Mortgage Market Survey showing around 3.17 percent as a recent 30-year fixed rate. Income growth may be affected by today’s economic changes, but mortgage rates are still projected to stay low and affordable. Close to half of first-time buyers said that, because of low rates, they were surprised to find they could afford even more than they expected.
Mortgage rates have a direct impact on your monthly payment. That’s why waiting to purchase until later in the year is a gamble: Rates are inching upward, which causes your monthly housing cost to automatically increase.
3. Either way, you’re paying someone’s mortgage.
Some renters may feel uncomfortable with the idea of taking on a mortgage and might put off buying their first house. But unless you happen to be living with a loved one rent-free, you’re going to be putting money toward a mortgage — whether it’s yours or your landlord’s.
As a homeowner, the monthly payment for your mortgage will function like “forced savings.” Each time you pay on your mortgage, your money will help to begin building your home equity with the potential to cash out on it in a few years. Monthly rent, in contrast, contributes to a landlord’s home equity and will most likely help their worth increase.
This may be an ideal time to start putting your monthly housing expense to work for you.
4. You can start your next chapter.
The actual cost of homeownership can be broken down like this: a home’s market value coupled with the current interest rate. As mentioned, home prices still appear to be rising.
What if these factors weren’t on the table? Would you still prefer to wait? This can tell you much more about the reason you want to buy and if it’s worth it to delay. Financial factors matter. But ultimately, you can’t put a price on having a secure place to raise your family; more room for kids, pets, and remote work; total control over how you decide to customize and renovate; and a deeper connection to your community.
The fact that now is an ideal time to buy is icing on the cake.