Buying a house for the first time can feel like a daunting process. To be successful, you need to know the ins and outs of the industry before taking the deep dive and nimbly maneuvering through the challenges that present themselves. In 2021, buying a house requires having a thorough understanding of how you stack up against the qualifications that lenders require. This is a tough process because most times, you are required to compete with other buyers and navigate a currently socially distanced home buying process. If you are looking to buy a house in 2021, here is a list of what to expect.
There are more buyers than homes for sale.
These days, the game of supply and demand is slightly slanted. The truth is that there are more buyers for houses than there are actual houses. As a buyer, if you find a well-priced house that is in stellar condition, there is a good chance that you will not be the only one making an offer on the house— even if it just hit the market. It is a sellers market in just about every state across America. In real estate, “sellers market” is a phrase that is used when there are more potential buyers than actual homes for sale. This means that it can be tough to immediately win over a seller if you make an offer, so being flexible is key. Also, it is imperative to have a good real estate agent who can coach you on how to make a solid offer to the seller.
Home prices are expected to be on the rise.
According to real estate experts across the country, home prices are expected to continue to go up in 2021, but not as rapidly as they did in 2020.
Currently, prices of existing homes increased by 5.9% at the start of 2021, compared with a 10% increase in 2020, according to forecasts from Freddie Mac, Fannie Mae, the National Association of Realtors and the Mortgage Bankers Association.
Prices flunctuate by season, so the time you choose to buy your house can affect how much you will pay. On a general note, buying a house can generally be most expensive in June and July and cheapest in January and February, according to a NerdWallet analysis of real estate market trends across 50 of the most populates metros in the U.S. This study data was obtained from Realtor.com from 2015 through 2019.
Mortgage rates are expected to stay low.
According to expert economists, mortgage rates are expected to remain at a historic low in 2021 after falling in 2020. The 30-year fixed-rate mortgage is projected to have a rate of 3.15% in 2021, which is slightly up from an average of 3.025% in 2020, according to an average of the latest forecasts by Freddie Mac, Fannie Mae, Mortgage Bankers Association, and the National Association of Realtors. Although the rates are low, it is still important to shop around for a mortgage before settling on the right one.
Digital tools are make buying a home easier.
The Pandemic has digitized the home buying process. From virtual home tours, e-closings, and smaller open houses to detailed Zoom meetings, digital platforms have helped to keep various real estate businesses going while also keeping people safe and during the COVID-19 Pandemic. Social distancing regulations, which vary by location, are slowly beginning to loosen with the rollout of the vaccines, but online tools such as Zoom, Google Meets, and Teams will outlive the Pandemic and remain staples in the real estate space.
Lender shopping continues to be crucial.
The number one home buyer mistake is shopping for a home before shopping for a lender. Before looking at homes, get your finances organized and shop for a lender. Before applying, thoroughly check your credit score to dispute any error on your credit report. Thoroughly checking is a very crucial step because nothing is more disappointing than finding out late that you don’t qualify for your dream home because your credit score isn’t up to par. Before you can get preapproved, get ready to thoroughly provide details about your income, debt, employment, and financial accounts. A mortgage preapproval is a contingent offer by a lender to loan you a certain amount under specific terms. It is not usually a guarantee that you will get the amount, but it shows lenders and real estate agents that you are a serious buyer.