In today’s real estate market, knowing where the market predictions stands is pertinent to making good financial decisions for your future. By all accounts, indicators point to the housing market remaining strong throughout 2021. The ongoing global pandemic will continue to drive the market throughout the year. Evaluating whether now is a good time to jump into home ownership or bide your time and rent for another year, is not so cut and dry.
In 2020, mortgage interest rates fell to help sustain the collapsing economy. At the same time, housing prices swelled with little-to-no inventory, demand was high, continuing to drive home prices up. With many afforded the opportunity to work from home during the pandemic, those that could took advantage of working remotely. They chose to sell their commute-free urban dwellings for bigger properties and more space in the suburbs and rural America.
Fast forward to 2021!
Expect the strong housing market to continue. Experts say rates will remain low to stimulate the economic recovery. In addition, the housing shortage will continue to cause bidding wars and home prices will continue to slowly tick upwards. Vacation areas like beach towns and ski resort towns will also see an influx of buyers as people continue to work remotely, also driving these prices higher. On the other hand, populated city areas will see a drop in pricing or perhaps turn toward the rental market.
So, the answer to is it a good time to buy a home really depends on your unique situation. If you have been saving up for this big day, purchasing a home now might not be a great idea and you may want to wait a year or two. If you are flush with cash, some say go for it; buying is always a better option than renting.
Perks of Owning Your Own Home
- Pay Yourself – Be your own landlord. Every month that mortgage payment will go to you, paying down your debt as your home appreciates in value.
- Appreciation – The average home appreciates in value about three-to-five percent annually. Steadily build your nest egg.
- Government Tax Breaks – For homeowners who itemize their federal deductions, the biggest tax break is deducting mortgage interest of up to $750,000 of your mortgage debt from their income taxes. There are many other tax breaks to consider as well, including deducting home office expenses such as utility bills, insurance costs, and office supplies.
As a potential homebuyer, if you decide to move forward in this market, builders are working furiously to keep up with the demand. With the growing number of people vaccinated and coming out of quarantine, inventory will also likely begin to grow as well.
After Discussing the Market Predictions, Want to Discuss Your Financial Future?
Determining when the right to buy a home is a tough decision. Talk to your mortgage loan officer to create a financial plan to homeownership.