Good News for the Real Estate Market in the New Year

December 30, 2020 by DRG

Welcome to 2021! We are excited to share some good news to start this new year: experts project an optimistic year for the 2021 housing market!

With mortgage rates forecasted to remain low, high buyer demand is expected to fuel more home sales and continue to increase home prices. Experts are projecting that rates will remain at or near 3% in 2021, fueling this strong buyer activity. Home prices are also expected to continue appreciating as more people buy in this new year.

But now it’s time to take a look back at 2020. Last year was a great year to purchase a home and the experts project this will stay the same in 2021. But what set up 2020 to be a great year for homeownership?

Over the past year, mortgage rates have fallen more than a full percentage point, hitting a new historic low 15 times. This is a great driver for homeownership, as today’s low rates provide consumers with some significant benefits. Here’s a look at three of them.

  1. Move-up or Downsize: One option is to consider moving into a new home, putting the equity you’ve likely gained in your current house toward a down payment on a new one that better meets your needs – something that’s truly a perfect fit, especially if your lifestyle has changed this year.
  2. Become a First-Time Homebuyer: There are many financial and non-financial benefits to owning a home, and the most important thing is to first decide when the time is right for you. You have to determine that on your own, but know that now is a great time to buy if you’re considering it. Just take a look at the cost of renting vs. buying.
  3. Refinance: If you already own a home, you may decide you’re going to refinance. It’s one way to lock in a lower monthly payment and save more over time. However, it also means paying upfront closing costs, too. If you want to take this route, you have to answer the question: Should I refinance my home?

Why 2020 Was a Great Year for Homeownership

Last year, the average mortgage rate was 3.93% (substantially higher than it is today). If you waited for a better time to make a move, market conditions have improved significantly. Today’s low mortgage rates are a huge perk for buyers, so it’s a great time to get more for your money and consider a new home.

The chart below shows how much you would save per month based on today’s rates compared to what you would have paid if you purchased a home exactly one year ago, depending on how much you finance:

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