Home Buying Trends for the Remainder of 2021
If you have been in the market to purchase a home, you know it’s been a really tough year to be a home buyer. High demand and a low supply of available homes have made it really competitive. While demand remains strong, we are starting to see a little bit of buyer exhaustion. Here are some thoughts that might help you find the energy to stay the course.
Expect a turn in the market, with slightly more inventory.
We’re already seeing a slight increase. Existing-home sales increased in June, snapping four consecutive months of declines, according to the National Association of Realtors®.
“Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales,” said Lawrence Yun, NAR’s chief economist.https://www.nar.realtor/existing-home-sales
This is good news for buyers seeking more options.
The market is still hyper-competitive.
Even though we’re experiencing small gains in the number of available homes for sale, inventory remains a challenge in most states. That’s why it’s still a sellers’ market, giving homeowners immense leverage when they decide to make a move. Research from the National Association of Realtors® shows the average number of offers on existing homes is five.
That may not seem like good news, knowing what you will be up against will help you be prepared to write stronger offers. There are a lot of reasons to buy right now, including the next two points.
Mortgage rates are expected to increase slightly over the next few months.
Various industry experts, including the National Association of Realtors®, predict that mortgage rates are will be increasing over the next year. By the middle of next year the average from all of these four forecasters is about three and a half percent. While no one can say with certainty whether it is going to be a little bit higher or a little bit lower, it’s going to cost more in the future to borrow the money to buy a home.
Home prices are expected to continue to increase.
Here again, the National Association of Realtors® has analyzed trends and while they expect home price increases to moderate, the overall trend is still for prices to rise.
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”https://www.nar.realtor/existing-home-sales
If you have been in the market for a new home, but haven’t had any success finding a home or winning against multiple offers, now is NOT the time to give up. Waiting will only cost you more.
The chart below shows how these factors combine to increase the monthly mortgage payment you can expect to pay if rates increase by 1% and home prices increase by just 1.9%.
The bottom line is that if you’re thinking about buying, there’s no time like the present. Let’s connect to talk about how you can take advantage of the conditions we’re seeing today to meet your homeownership goals.