The thought of being a homeowner has been appealing to you for a while now. You’ve been saving up money. You’ve been having a lot of conversations that include some variation of the words “These are the things the house needs to have.”. And your FICO score is so high that it’s halfway to the moon.
According to Business Insider, the 2020 real estate market was one for the record books.
But of course, none of that answers the million-dollar question:
Should you be buying a house in 2021?
No one can tell you what to do, but we do have a list of four good reasons why 2021 is a great year to buy a home.
Reason #1: Interest Rates Are Historically Low
The Federal Reserve lowered interest rates in 2020 and then expressed plans to leave the rates at near zero until 2023. Why was this major news for the real estate industry?
Because any time you’re taking out a loan, a reduced interest rate is the financial equivalent of being offered a discount. And when you’re dealing with the price of a home, every percentage point you save could put four or five figures back into your pocket. That’s why a lot of people have been wondering if refinancing makes sense.
For 2021, while experts may be predicting that the mortgage rate will likely go up, the federal rates will continue to make borrowing cheap. And simply because we may not see these types of once-in-a-lifetime discounts again in the near future, this year is an exceptional year to snatch up the property you’re looking for.
Reason #2: Price Increases Will Likely Slow Down
To hear some current homeowners tell it, the 2020 real estate market was like a never-ending scene from Gladiator. A lot of people were going through listings, making offers, and following the process only to get beaten out by buyers making all-cash and above-market offers.
If the thought of all this competition is making you nervous, you have a lot to look forward to in 2021. People will still be looking to take advantage of the historically low interest rates so there may be some competition. But the sky-high prices that made 2020 a roller coaster of a year in real estate will probably not be as high after this.
Reason #3: There Could Be More Houses Available
In 2020, prices shot up in part because the reduced interest rates created a situation where lots of people wanted to buy during a time when not as many people were selling.
Several experts that were interviewed by Forbes predicted that there would likely be more homes available for sale in 2021 as compared to 2020.
This is good news for home buyers in search of a home at a fair price. And it’s even better news for those who want a healthy balance between price and aesthetic. On a practical level, when fewer people are selling, it’s possible to double or even triple the size of your “I would buy that” list only to end up with a house that you don’t love.
But as distressed houses, sellers looking to cash in on rising prices, and work-from-home relocations start to kick in, you will probably see more housing options available as 2021 marches on.
Reason #4: Work Circumstances May Allow For More Flexibility
Review42 observed that even before the pandemic, remote work had increased by 142% from 2005 to 2018.
And as companies are becoming more open to letting people work from home after the pandemic, working remotely isn’t just a pie in the sky, “I wish I could do this but I know it won’t happen.” non-starter. It’s an option that businesses are looking at as a means of saving money.
So how does the new normal in work impact your house hunt?
For starters, current homeowners who have been holding off on their desire for more backyard space due to the horrors of the workplace commute have the luxury of moving wherever they want if they work remotely. And similarly, if you’ve been benefiting from the new normal, your pool of options just got bigger as well.
It’s a win-win dynamic.
Here’s What You Should Know About Buying a House in 2021
The 2020 real estate market took many people by surprise. But if you’re looking at making 2021 your year of home ownership, you have every reason to believe that 2020’s momentum was just the beginning. If you’ve been feeling unsure about dipping your toe into the market, 2021 has all the makings of being a fantastic year for real estate.