Is Now A Good Time To Buy A House? What to Know In 2021
Ashley Chorpenning3-minute read
January 09, 2021
Due in large part to COVID-19, mortgage rates have hit record lows since early 2020. Although buyers have reported growth in their home buying budgets and lower monthly payments, additional factors make the question, “Is this a good time to buy a house?” a difficult one to answer.
Lower rates may entice buyers, but it’s essential to consider the broader economic picture before going through with a home purchase.
Why Now Is A Good Time To Buy A House
For many reasons, it might be the right time for you to buy a home. Here are just a few:
Mortgage Rates Are Low
Earlier in 2020, the Federal Reserve made a substantial rate cut. When that happened, the mortgage industry saw the interest rates on 30-year and 15-year mortgages drop considerably.
With that, mortgage rates are relatively low right now. Since your interest rate can play a significant role in your loan’s total cost, snagging a mortgage while interest rates are low could be a good move.
Working From Home May Demand A Bigger Space
Since COVID-19 began, many of us started working from home. What may have started as a temporary measure has stretched into months of avoiding the office when possible.
As you spend more time in your current home, you might find that you need a larger space to function effectively. Depending on your situation, it might be time to stretch your legs in a bigger home.
Moving May Be Quicker And Easier
With many of us still working from home, you may have more time to handle a move. Although balancing a move while working from home could be a challenge, it may not be as tricky as dealing with a significant move with an office commute zapping your free time.
Why Buying A House Now May Not Be A Good Idea
While there are reasons to buy a home in current conditions, there are also things to keep in mind before taking the leap.
COVID-19 Has Complicated Home Buying
COVID-19 has changed the face of many industries, and the real estate industry is not any different. Depending on your area, you may be faced with additional obstacles in the home buying process.
It may be challenging to find a real estate agent willing to work with you in person. If you want to view a home in-person, you may be disappointed with the recent evolution of home showing opportunities.
Additionally, depending on where you live, it may be challenging to move from the offer to closing due to pandemic-related restrictions surrounding appraisals and other in-person appointments.
We’re in A Seller’s Market
Right now, the housing market is a seller’s market. With that, home buyers are facing rising home prices across the country. As the market continues to shift in favor of sellers, buyers may want to hold off on a home search. Otherwise, they could be dealing with high prices and fewer available options.
You Could Lose Your Job
In the past few months, the U.S. has seen dramatic unemployment figures and a dramatically slowed economy. The current uncertainty about a recovery leaves many in a high-risk position of being furloughed or laid off.
It would be extremely stressful to become a new homeowner and then lose your job. With a mortgage to pay off, anyone would dread that scenario. Plus, making a substantial down payment to secure the best terms from lenders could cause your savings to disappear.
A job loss is the most significant risk with the most pronounced consequences that home buyers face today. It can be challenging to move forward with this significant purchase if you worry about your employment's stability.
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