New year, new house? Here’s how to prepare for the 2021 market; Finally! It’s the countdown to the new year, and we all can’t wait for 2020 to be over. If a new house is on your plan for the new year, a bit of early advice is to prepare for the 2021 market.
Before the pandemic, the housing market has been on a stupendous growth until June 2020. The market began to face extremely below average interests and shortages of available housing inventory.
Yet, home sales have risen even more in both housing supply and demand. This has reached their highest point since the beginning of the pandemic.
The housing market has been more active in preparation for the next year.
EFFECT ON MORTGAGE
The mortgage rate has been on a low since the beginning of the pandemic, and it has continued to decline even more in the recent month.
What does a low mortgage rate mean for buyers?
A low mortgage rate means a lower mortgage payment, i.e., the percentage of payment is at its all-time low. This applies to interest too.
It does sound good, but the competition becomes tougher with more bidders trying for the same home and sellers selling for higher prices.
For sellers, they have an opportunity of having a large number of buyers, which would mean longer bidding; and of course, the highest bidder would be the one with the highest price.
With low mortgage rates and increasing demands, the average prices are on the increase.
Buyers have been able to handle the increase in prices, thanks to low mortgage rates.
The affordability rate has declined due to higher interest rates. So while making budgets for your housing plan, see it through a trusted mortgager to have it all sorted.
This is to avoid under-planning and to show readiness to buy the home because your aim is to be the best choice out of the increasing number of buyers.
INCREASE OR DECREASE IN PROPERTIES
To know the rate at which properties increase or decrease is a means to prepare for the 2021 market.
The cycle since the pandemic has been increasing buyers and fewer properties. One thing 2020 has taught us is our lives can change instantly, which applies to the property rates.
There might be an increase in migration in 2021 due to changes in jobs. More sellers could be on the move, and this is good for the real estate market.
All hopes on the vaccine can also put the housing market back into its natural cycle and increase sellers.
SPEED OF HOME SALES
The speed at which homes are being bought should also be monitored in preparing for the 2021 market.
The uncertainty of a second wave has declined the speed of home sales. This suggests that house prices will be more than your planned budget; they might still be affordable, but they will surely be more expensive.
The big question now is, “Will the housing market and its prices crash?”
Knowing whether or not the housing market and its prices crashing are the same as knowing if the Great Recession will reoccur in the years to come.
The Housing Market is the supply and demand for houses, and it is affected by house prices with other factors like interest rates, economic growth, number of households, etc.
With the effects of the pandemic on the economy, the housing market was not missed, but still, it has continued to stand, and that’s good news.
The Housing market is not near crashing and will survive whatever horror it faces in the next year and other years to come.
Its all-time low this year is still an average low, and with our hopes set high on the vaccines, better days are to come.
If you plan to buy a house or rent a house in the next year, pay very close attention to the housing market, it may favor you more than you think.