Weekly Mortgage Update 1-27-2021
Hi everyone it’s Jamie here with the Real 411. It’s a new year and we have new administration in office which has a lot of people wondering what will happen to rates and the real estate market in 2021.
We believe that interest rates will stay reasonably close to where they are and we don’t expect to see another significant drop. Just to give you a comparison – rates are 7/8% lower today than they were at this time last year.
If you are considering refinancing – waiting will not benefit you. It is best to act now versus taking the big risk that low rates will disappear and shoot up on any given day. These current low rates could be in our rear view mirror forever.
In the purchase market, home sales are up 22% but inventory is down 23%. The population has grown but the inventory is not there to support it. This is an indication that home prices are going to go higher. It also means that we will continue to see homes getting multiple competing offers from several buyers and that home sellers will be selective about which offer they accept.
You may find yourself paying more for a home than you would otherwise want to, however with the cost of money being at an all time low in the form of low rates, waiting for home prices to go down and rates to go up actually decreases affordability.
Home buyers who were waiting for the market to fall apart 12 months ago and never purchased a home missed out on roughly a 20% increase in equity over that period of time. That’s right – buyers who didn’t wait and bought a home last year benefitted from an average of 20% equity in their new home in just their first 12 months of ownership.
If you have been considering a home purchase, now is the time to get your ducks in a row. Talk with a mortgage expert, get yourself pre-approved and shop confidently for your next home. The power of a pre-approval can and will make the difference in your offer standing out above the rest.
Thanks for watching and have a great day!