Summer’s the season we’ve all been looking forward to, as restrictions continue to be lifted. Homebuyers who put their house-hunt on hold over the last year are returning to the market.
If you’re ready to move, it can help to answer this question: Are you better off waiting out the season, or is now a good time to buy?
4 things every homebuyer needs to know about this summer’s housing market
You may be a renter ready to put down roots and start building your equity, or perhaps you’re a homeowner hoping to switch out your starter home for your forever place.
If so, keep in mind that:
1. Housing prices could still increase.
Available homes for sale remain in very short supply as the economy recovers. Due to this ultra-tight inventory coupled with high buyer demand, home prices are projected to keep rising.
According to a recent Goldman Sachs research note:
“Consumer surveys indicate that household buying intentions are now the highest in 20 years… As a result, the model projects double-digit price gains both this year and next.”
Home values are expected to go up again soon. So, waiting to buy could cost you. And because housing inventory is over 28-percent lower than it was a year ago: When you find a home you’re interested in, it’s a good idea to act quickly.
You could close on your dream house faster than you think. Find out how.
2. Mortgage rates are low for now.
Throughout the pandemic, mortgage interest rates hit multiple all-time lows. The Primary Mortgage Market Survey from Freddie Mac indicates that rates for a 30-year fixed-rate mortgage have plummeted to about 2.98 percent. But Freddie Mac’s recent Forecast projects rates will start to tick upward, potentially reaching 3.7 percent by next year.
Danielle Hale, realtor.com’s Chief Economist, confirms that:
“Our long-term view for mortgage rates in 2021 is higher. As the economic outlook strengthens, thanks to progress against coronavirus and vaccines plus a dose of stimulus from the government, this pushes up expectations for economic growth…”
Your monthly mortgage payment is directly impacted by every mortgage rate increase. Buying a house at today’s low rates could make your monthly housing cost cheaper.
3. You’re always paying someone’s mortgage.
Many renters haven’t taken the plunge and bought a house yet because they’re not comfortable taking on a mortgage. But unless you’re living with friends or relatives rent-free, you’re going to be paying somebody’s mortgage — your landlord’s or your own.
When you own your home, your mortgage payment works like a “forced savings plan,” allowing you to build your own equity that you could cash out in the future. When you’re renting, you’re contributing to your landlord’s equity and can almost guarantee that their worth will increase.
Buying a home puts your monthly housing cost to work for you, not someone else. By buying now, you could join millions of homeowners who’ve gained thousands of dollars in equity in the past year alone, as home values continue to appreciate.
4. The true cost of waiting is what counts.
The cost of owning a house comes down to two main components: a home’s price and today’s mortgage rate. Both are soon expected to increase.
If they weren’t, would it still be a good idea to wait? Ask yourself the real reason you want to buy a home. This can help you decide if it’s worth it.
You, like roughly 90 percent of Americans, may value homeownership because it gives you security, privacy, a place to raise a family, and more control over your living space. You may also want a better location, a bigger house, a different layout of your home, or a new school district. If any of these benefits ring true, now may still be the right time to buy.
More house, less monthly payment please
With mortgage rates low and home prices holding steady for now, you could buy a bigger home — or a house in a better location — without changing your price range or your payment. In short, you may get more for less by buying now instead of later. Want help? Get home buying advice from a local loan officer now.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.