Buying in the Housing Market of 2021

Why does it seem like everyone is suddenly buying a house right now? You may have heard coworkers tell stories of putting a house on the market and getting even more than the asking price or noticed the number of “For Sale” signs going up around the neighborhood.  

Many people are, in fact, buying a home right now, and yes, the market is white-hot and abundant with real estate trends. So, if you are interested in buying a home now, what can you expect when buying a home in 2021? You’re probably thinking along the lines of how to buy a house in 2021?

There Has Never Been a Better Time to Finance.  

One of the main reasons the market is hot right now is because financing rates are at an all-time low. There has never been a better time to get a mortgage. This is a good time to get your finances in order and be ready to hop on a good deal.  

How do you get started? Start by checking your credit score. Even with a great deal, lenders still have tightened lending standards so that people don’t purchase more homes than they can afford.  

Know your credit score and sit down with a mortgage broker to find out how much home you can afford. Start saving for a down payment and closing costs on a home.  

Gather your documents relating to your finances – pay stubs, tax returns, W-2s, and other items required to prove your financial situation.  Keep these things in a folder you have easy access to.  

However, don’t buy just because interest rates are low as there are other factors to consider first.

Understand what is driving the market trends right now.  

One of the reasons the markets are hot nationwide is because many people are leaving urban centers for more space and better prices. The conditions in your local neighborhood are being repeated nationwide.  

On top of this shift in the population (Goodbye, California!), building materials have skyrocketed in recent months. This means that newly built houses are more expensive than in years past and many are looking to purchase homes already in existence as a result. This demand for housing is very real – not a bubble.  This is one of the true real estate trends, but it will even out over time.  

What you should understand right now, however, is that bidding wars over hot properties are the norm and sometimes properties go well over the asking price.  If you’ve done your financial homework first, you will know when to walk away from a “deal” that isn’t that great.

Get the right people in your corner.  

This means starting with a mortgage broker and a real estate agent. Ask lots of questions! Your mortgage broker can help you understand the variety of loans you qualify for and how much of a down payment each one would require.  

They can help you determine if you will have to pay private mortgage insurance and what the extra costs might be. A great real estate agent thrives on answering questions and is a source of education as well as someone who can broker a tour of a home.  

A great agent will help you identify a range of properties that suit your needs and your wants.  They can help narrow properties that fit your actual budget. They will also help walk you through the process of paperwork, inspections, closing, and more.  Yes, you can do this alone, but you really shouldn’t.  

A great real estate agent is golden. A real estate agent is a local expert not only on the house you want to buy, but the neighborhood, the schools, and the real estate trends in the market going forward. What’s more is that the agent’s commission doesn’t typically come out of your pocket, as the seller pays the commission. 

Don’t rush, even if everyone else is rushing.  

It’s important to remember that this year is not the end all be all of the houses on the market, there will be a continuous cycle of houses being sold and bought for years to come. There is no “last chance” home.  

There will always be another opportunity, don’t let buying fever sweep you into a financially bad decision or a house you're not completely in love with.  This is most likely the biggest financial commitment you will ever make, so make it one that you can stand by.  

You also need to consider your own timeline. If you’re locked into a lease, you don’t want to create the additional stress of breaking a lease and dealing with an angry landlord.  Remember to be reasonable about your own situation as well.  Having a good understanding of your own situation will keep you protected from a financial mishap.

So, How to buy a house in 2021?  

Take advantage of the many opportunities to look at properties online. Drone technology has enabled great views of homes we wouldn’t get otherwise, and many agents have 3-D tours of properties.  

Stay within your budget, no matter what is going on in the markets, and don’t give in to emotional spending. With good people in your corner and a strong sense of your own financial picture, you can easily find your dream home in the 2021 market. 

On the hunt for a new home? Get in touch with one of the expert realtors in the Homes & Land family!