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2021 is underway, and while last year taught us to expect the unexpected, there are still some trends in the housing market that will predict buyer, seller, and investor behavior. Circumstances continue to fluctuate across the nation with a new president as well as state by state approaches to managing the Coronavirus Pandemic. With these uncertain conditions, Champion Title can help clarify the course. As a top rated title and settlement agency in the DC Metro region for close to 30 years, we have developed the skills to determine which market indicators to keep an eye out for, and how they will impact the industry. Read on for your short-list guide to navigating the uncertain waters ahead.
Low inventory. Housing inventory will continue to trend low, a carry over from 2020. With an increased number of interested buyers flooding the market due to escape from more urban areas among other reasons, homes for sale are in higher demand and going under contract more swiftly. This makes it difficult to spend a significant amount of time deliberating on purchasing that dream home. Buyers should be prepared to act quickly by getting preapproved, not prequalified. Under preapproval the lender has already processed the loan and will be ready to lend funds as soon as needed. Also, buyers should give themselves more options by making a list of things they need in their new home vs. things they would like, and expand their search area.
Home prices continue to rise. With a sustained seller’s market, home prices will continue increasing. Buyers should make sure to calculate just how much they can manage on a mortgage before placing an offer. A good guide is no more than 25% of monthly net income. And to gain an advantage over the competition in a buying war, it’s a good idea to set aside 15-20% as down payment in advance to have on hand when ready to make an offer.
Low interest rates. Interest rates are still extremely low, and while they are fluctuating slightly, experts predict they will stay right around 3% for the remainder of 2021. This is good news for those financing or refinancing a home. Caution: even though interest rates are exceptionally low, borrowers still need to make sure a new monthly mortgage payment on a home purchase is affordable. The low interest rate is an added bonus.
Online real estate services increasingly prevalent. For a number of reasons, online marketing for real estate transactions has grown significantly in the last 12 months. This has benefited home shoppers from an efficiency perspective as initial information and impressions can be gathered from the comfort of their own home. In addition, eClosings and “virtual settlements” will be expanded, further transforming traditional settlements into a more convenient experience. For more information on Champion Title’s eClosing options – please email us at eclosing@championtitle.com!
Resurgence of “alternative” homebuying options. A strong seller’s market leads to creative ways to secure a new home. One approach that will increase in popularity this year is renting-to-buy. This allows the buyer to move into the home without immediately paying the down payment, then in theory saving money over the next year or two to put towards the eventual purchase.
Time will tell what 2021 truly has in store for us, but with insight and action we will be ready for whatever lies ahead. And Champion Title is here to help! We are ready to guide you through your title and settlement needs. For more information or questions regarding any of our services, please call us at (703) 444-4100, or visit our website at www.championtitle.com.
