Not only has residential real estate made a full recovery from last year, but households that delayed their plans during the height of the health crisis are ready to regroup. If you’re thinking of buying a home, this summer may be your moment. Here’s a dive into some of the biggest wins for homebuyers this season.
1. Mortgage Rates Are Still Low
Last year, we saw the lowest mortgage rates in recorded history as they fell below 3% for the first time ever. This season, they’re inching up slightly, but are still incredibly low compared to the historic norm. According to Freddie Mac:
“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”
Today’s low mortgage rates are creating a great opportunity for buyers, but it’s unlikely they’ll last much longer. Buying this summer is the best way to secure a home with an impressively low rate.
2. Buying Is More Affordable Than Renting
With today’s low mortgage rates leading the way, buyer purchasing power is strong. According to Mike Loftin, author of Homeownership Is Affordable Housing from the Urban Institute:
“Contrary to popular belief, owning one’s own home is frequently more affordable than renting. It is cheaper to buy a home than it is to rent in 2/3 of American counties.”
Buying a home now instead of renting one may be the game-changer that amplifies long-term savings for renters who are ready to become homeowners. When paying a mortgage as opposed to paying rent, that money is reinvested back in your favor, so you’re contributing to your own net worth when you own a home. This is a term called equity, and it’s one of the biggest financial benefits of homeownership.
3. Equity Is Growing
The latest Homeowner Equity Report from CoreLogic notes that the average homeowner gained $26,300 in equity over the past year. With equity growing so significantly, you can feel confident that homeownership is a sound investment in your future.
Homeowner Equity Gains over the Last Year
4. Home Prices Are Appreciating
According to many leading experts, home prices are expected to appreciate through 2022. When home values rise, it’s another factor that increases your equity. According to the same report:
“As competition for the dwindling supply of for-sale homes drove prices up, average annual homeowner equity gains in the fourth quarter of 2020 reached the highest level since 2013. For current owners, these gains have created a buffer against financial difficulties brought on by the pandemic.”
Knowing home values are increasing while mortgage rates are so low should help you feel confident that buying a home this year is advantageous from a price perspective and as a strong long-term investment.
Bottom Line
If you’re considering buying a home, this may be your moment, especially with today’s low mortgage rates. Let’s connect to discuss your changing needs and set you up for success in the homebuying process.