Rates are expected to rise modestly in 2021 but remain notedly low, according to Freddie Mac. For example, the 30-year fixed-rate mortgage rate was 2.77% as of Jan. 21. This, combined with a desire for more space or a change of scenery amid the ongoing pandemic, can make now the right time to put down roots.
“With record-low mortgage rates and some of the best mortgage options available, now is one of the best times to purchase a home,” said Jason Gelios, a realtor in Southeast Michigan. “We really did not see a slow down during the pandemic, yet some homeowners were still hesitant to list their home. What this means is inventory will rise, making more homes available.”
Gelios said sellers in his local area of Southeast Michigan that were previously hesitant to put their homes on the market are now listing them due to the multitude of buyers and low rates.
“Even with the hyperactive market leaning more towards the home seller, a patient and laser-focused home buyer could snag a great home at a great rate,” Gelios said. “Even though home prices are higher in this market, the low rate will make up the difference in terms of savings on the monthly payment.”
This can allow you to get a home at a lower monthly payment than originally intended or even increase your purchasing power.
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“If you are ready to sail into homeownership, the wind is definitely at your back right now,” agreed Ben Creamer, principal and managing broker of Downtown Realty Company in Chicago. “Because buyers can spend more on a house and have lower mortgage payments, we’re seeing more clients who are able to upsize or even buy their dream homes.”
Creamer said another advantage of starting your search now is getting a jump on the spring and summer buyers. He said more people tend to search for homes during these months, making the market more competitive.
“Buying during a less competitive season gives you more leverage with sellers,” Creamer said. It can also make the process less stressful for the buyer because there isn’t quite as much uncertainty and pressure from multiple competing offers.”
If the inventory is high right now in your desired area, Creamer said this is also a great time to find a bargain on a home.
“Unlike typical winter months, there are more homes on the market now, because the pandemic has caused just about everyone to reconsider what they need in a home, and many have decided to move as a result,” Creamer said. “In certain areas where inventory is at historic highs, prices have dropped accordingly.”
However, he warned home prices will rise again as the spring and summer months approach, so he advises not waiting too long to start to make a purchase.