The housing market recovery has been nothing short of remarkable. Many experts agree the turnaround from the nation’s economic pause is playing out extremely well for real estate, so it’s framing up to be an ideal time to buy a home for those who are ready to make a purchase. Here’s a dive into some of the biggest wins for homebuyers this season.
1. Mortgage Rates Are Low
In 2020, mortgage rates hit all-time lows more than a dozen times, falling below 3% for the first time ever. Continued low rates have set buyers up for significant long-term gains. realtor.com notes:
“Given this means homes could cost potentially tens of thousands less over the lifetime of the loan.”
Essentially, it’s less expensive to borrow money for a home loan today, a huge opportunity for buyers to capitalize on right now before rates start to rise.
2. Buying Is More Affordable Than Renting
This trend toward low mortgage rates has made the typical monthly payment (including principal and interest) less expensive for buyers. According to realtor.com:
“Over the past year, many counties have seen the difference between the cost to purchase a home compared to the cost to rent a home improve toward favoring buying a home.”
Buying a home versus renting one may be a game-changer, as it amplifies long-term savings for homeowners. When paying a mortgage, as opposed to paying rent, that money is reinvested back in your favor. Instead of contributing to your landlord’s savings, you’re contributing to your own net worth. This is a term called equity, and it is one of the biggest financial benefits of owning a home.
3. Equity Is Growing
According to John Burns Consulting, 58.7% of homes in the U.S. have at least 60% equity, and 42.1% of all homes in this country are mortgage-free, meaning they’re owned free and clear.
In addition, CoreLogic notes the average equity mortgaged homes have today is $177,000. That’s a tremendous amount of forced savings for homeowners.
With this much equity in place for the typical homeowner, the chance of the market seeing a rush of foreclosures is not likely. Today’s homeowners have many options to avoid foreclosure, such as selling their homes and leveraging that equity to protect their investment.
As a buyer, you can rest assured that your homeownership investment is a sound one, and foreclosures are not expected to dominate the market as they did when the housing bubble burst over 10 years ago.
4. Home Prices Are Appreciating
According to leading experts, home prices are forecasted to continue appreciating. Today, many experts are re-forecasting their projections in an upward direction, anticipating home prices to continue rising through 2021.
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 a strong long-term investment.
Strock Bottom Line
If you’re considering buying a home, this may be your moment, especially with today’s low mortgage rates. Connect with one of Strock Real Estate’s team of agents – we will help you assess your needs and set you up for success in the home buying process.