The impact of the pandemic has forever changed the way we approach our personal and professional lives. One bright spot in the economy is housing. Low rates, driven by quantitative easing (QE) by the Federal Reserve helped fuel a boom in both mortgage refinancing and purchases, making 2020 the second-best year in US history.
The Mortgage Bankers Association has forecasted that although the average rate for a 30-year mortgage will gradually increase over the next few years, it will remain historically low. This means lower mortgage payments and bigger home buying budgets, which is great news for homebuyers.
The massive move to work-from-home has many thinking about a place with enough space to accommodate a home office, or simply spread out a little now that everyone spends more time in their homes. New work-from-home policies have also given many the freedom to reconsider where they live, allowing them to relocate to less expensive or otherwise more desirable areas without sacrificing their jobs.
These cultural changes combined with low rates and a shortage in the single-family home inventory across the county has also generated a competitive housing market. But as America returns to work, supplies for builders will return to needed production levels, new home construction will continue to rise, and ultimately the supply-demand imbalance will improve. In addition, the government is proposing multiple housing initiatives for low- and moderate-income buyers, which will increase the nation’s housing supply.
Homeownership remains linked to an effective way to build long-term wealth. Paying toward the balance of a mortgage, month by month, builds your equity instead of someone else’s. Owning a home embodies the promise of individual autonomy and is the basis for several positive social, economic, family and civic outcomes.
Whatever your reasons for entering the housing market, 2021 could be your year to become a first-time homebuyer. Find a mortgage lender you can trust, know your budget, and put your best foot forward in your offer. Then enjoy the beauty of owning your own home.