Here’s what buyers need to know to master our 2021 market.
Friends and clients, buying a home in a seller’s market is a challenge. With low inventory and high demand, homeowners have the upper hand, and they know it. However, there are specific things to know about the 2021 market that will help you as a buyer—even in a challenging environment like this.
For starters, interest rates remain at all-time lows. The average rate for a 30-year fixed mortgage dropped even further to 2.79% during the week of January 14. All of the major industry players predict that mortgage rates will stay in the low 3% range throughout 2021. Freddie Mac projects a 3% average across the entire year.
“With low inventory and high demand, homeowners have the upper hand, and they know it.”
However, because interest rates are so low, home prices will probably continue to rise— hopefully at a slower pace than the last five years. The Mortgage Bankers Association projects a modest 2.4% jump in home prices, while Freddie Mac projects an increase of 2.6%. With so much going on, it’s more important than ever that you’re properly prepared as a homebuyer. This means having all of your financial ducks in a row, getting pre-approved, and being ready to make a quick offer when the right home hits the market.
If you find yourself in a bidding war, here’s some advice: Don’t just focus on the price. The terms of your offer are just as important. When you do things like waive contingencies or add an escalation clause, it shows the seller you’re extremely serious without having to increase your offer price.
A bonus tip: Consider writing a personalized cover letter to the seller. If price and terms are all equal, it may be the thing you need to stand out from the rest of the competition and get the home of your dreams.
An experienced agent is a huge asset in your situation, and if buying a home is in your plans this spring, it’s time to start the process. You can get a jump on the spring market by taking a look at the homes that are available on our website comingsoonhomes.com. The only way for you to get ahead of the market and the competition is to know about homes that will be for sale in the near future.
As always, if you’re thinking about buying or have any questions, give me a call. I’m here to help and I’d love to talk to you soon!