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In 2020 we saw historically low mortgage rates, and throughout the first half of 2021, rates have remained quite the same. And analysts predict that rates will continue to be lower than average further into the year and into the next.
Many people are wondering if the days of record lows are behind us. But the good news is rates are still lower than average and, for the most part, mixed. What’s more, even as mortgage rates rise, they are predicted to do so steadily.
Thus, this year is still an excellent time to secure a home loan. This is especially true, at the moment, as both mortgage and refinance rates are still relatively low compared to previous years. Plus, according to economists and financial analysts, rates are likely to stabilize over the next 30 days.
That said, overall, the US housing market is expected to continue to be hot moving forward for a number of reasons. Thanks to attractive mortgage rates, vaccine distribution, and rebounding consumer confidence, the 2021 and 2022 real estate markets are predicted to sizzle.
As we make our way through summer 2021, mortgage rates continue to fluctuate. Clearly, for the first half of the year, rates pretty much hovered somewhere around 3 percent. And as of mid-June 2021, the average mortgage rates fell below 3 percent.
So what does this mean going forward? Well, it means that there is a strong likelihood that mortgage rates throughout the second half of 2021 and into early next year could remain low enough to entice home buyers and thus will continue to be near or just below 3 percent in the near-term.
Despite the current favorable rates, however, there is still the expectation that mortgage rates will rise during the summer months. Year over year inflation numbers are expected to jump well above the Federal Reserve’s target of 2%. While this may be temporary it will still lead to market volatility and likely somewhat higher mortgage rates.
According to a fairly recent forecast from the Mortgage Bankers Association, rates could creep upward to around 3.4 percent by the end of 2021. Clearly, only time will tell when and just how much mortgage rates will rise this year. But, overall, low rates or at least lower than average rates are expected throughout the remainder of 2021 and into 2022.
While navigating this year’s market, there are actually a few trends that home buyers should keep in mind. For instance, there is no denying that at present, home inventory is low and meeting buyer demand has been tricky.
And if the last 12 months have taught us anything, it is that such an imbalance puts upward pressure on home prices and simultaneously increases competition among buyers. Low inventory has also given sellers the upper hand when it comes to negotiations.
As a result, these trends are expected to continue to affect the housing market until demand can be met. That said, the good news here is that there has been and continues to be a concerted effort to increase residential construction, which means that new home sales will continue to rise, and eventually the market will become more balanced.
Additionally, the US economy is on its way to a full recovery of sorts, and thus consumer confidence is also on the rise. Coupled together, these two trends mean that as the economy slowly recovers, demand within the housing market during the summer months and the latter half of this year is likely to grow.
This added boost to the market, along with warmer weather and wider vaccine distribution, all translate to a hot housing market for the next couple of months. Home buyers entering a hot housing market should, therefore, expect stiff competition from other buyers. In contrast, sellers will most likely continue to enjoy their market leverage for the foreseeable future.
With the current rates, the first thing buyers should know is now is the perfect time to buy a home. So if you have been contemplating a home purchase, there is no time like the present. Of course, due to low inventory, as previously mentioned, it is a seller’s market.
Therefore, it is important that as a buyer, you sharpen your home-buying tools or skills if you want to compete successfully. Strategies then that can be beneficial and will allow you to compete successfully over the coming months include:
Ultimately, these are just a few things you can do to ensure that you successfully purchase your dream home and make the most out of the current mortgage rates in 2021.
Do you have questions about home loans or how you can get approved? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.
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