Did you know that mortgage rates are expected to remain near borrower-friendly levels and will help maintain strong housing demand in 2021? Certainly, the Covid19 pandemic has driven an unexpected housing boom. The lowered mortgage rates and the increased work from home set-up has initiated a rapid growth in the housing market, especially for lesser dense suburban areas. Yup, some people are flipping houses just as easy as they’re flipping burgers.
In the past year, I also noticed a lot of reality shows with real estate settings have emerged on Netflix like Selling Sunsets and Million Dollar Beach House, Bravo’s Million Dollar Listing, and soon Amazon Prime is also releasing an Aussie version of Selling Sunsets. All these emergence in our mainstream media just reflects the robust real estate boom.
In fact, a Fannie Mae housing demand report shows that the single-family demand in 2021 has increased to 24.8% from 11.6% in 2020 but will experience a decline by 2022 with -6.6%. Fannie Mae predicts overall single-family mortgage market originations in 2021 and 2022 to total $4.0 trillion and $3.0 trillion, up from $3.9 trillion and $2.9 trillion, respectively. However, another mortgage giant Freddie Mac reported that the total originations will decline to $3.5 trillion in 2021 as higher mortgage rates have the potential to soften the robust demand the housing market has been experiencing.
The movement in the housing market has been quite fluid. Those with the purchasing capacity would favor larger single-family properties, and most younger buyers with limited income have already moved back in with their parents to save money during the pandemic. There is also a trend that millennials have started to make up the largest share of homebuyers in the US, according to a 2020 survey from the National Association of Realtors, and 31% of these are first-time homebuyers. About 4.8 million millennials are turning 30 this year and will continue to do so for the next three years, a significant positive force for the economy and housing. With this, the supply in the housing market will continue to have the need to keep up with the demand as more and more millenials are entering the housing market as first-time homebuyers–just like my friend Nini (shown in the photo below), a single mom living in California, who just bought her new home a few days ago.
Obtaining a mortgage is a crucial step in purchasing your first home, and there are several factors for choosing the most appropriate one. If you’re looking for a home mortgage for the first time, you may find it difficult to sort through all the financing options. Running through all the financing options available for first-time homebuyers can be daunting. A good mortgage broker or mortgage banker should be able to help steer you through all the different programs and options, but nothing will serve you better than knowing your priorities for a mortgage loan.
With this, one of the tools you can use to empower yourself with your real estate purchasing decisions is by using this Monthly Payment Calculator. It’s simple, straightforward, and handy–especially if you’re a first-time millenial homebuyer. Plus, you can even have a better way of weighing in all your housing options by trying out the other calculators available at Mortgage Calculators. These handy online tools can give you a bigger picture of what you’re getting into.
People will continue to buy new homes so long as they can afford it. As most of us were confined for months in our quarantine living and work from home situation, we all got the chance to introspect and, by now, I’m sure we all have started to realize the deficiencies in our current home. During the past year, people have started to see the value of having space as we realize the need to have more of it for our ‘home office,’ for educating children at home, and for exercising and recreating at home. Some people would simply want better homes and at more isolated locations. If the pandemic will be here with us for a while, we might as well find somewhere extra spacious, quiet, and safe to live. Of course, since mortgage rates in some areas are going down, this makes property more affordable.
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