Should someone buy a home in 2021? The answer to that question will depend on the person’s situation and thoughts on the future market. If you plan to buy a home, then I recommend looking at the trends for 2020. It would also be wise for anyone thinking about buying a home in 2021 to look at the market in 2020 and make an educated decision. Since we have been working for many years right here in the real estate marketplace, we have had plenty of local experience over the years.
Check out our recent testimonials about buying a home in 2021.
We are in 2021 right now. Things have already started to improve. As of the first quarter of 2021, home prices and sales volume increased from 2020’s fourth quarter. According to economist Robert Shiller, the housing market is still undervalued by around 18%, and I believe it will continue rising throughout the year until the end of 2021.
What to consider about buying a home this year?
The first question I would ask someone about buying a home this year is: How do you plan to pay for the down payment and closing costs? Most people will go to their banks to get a loan, but interest rates are still high, making it hard for some to afford mortgage payments. As of right now, the best way to buy a home is to have a 20% down payment. This way, you will be able to avoid getting private mortgage insurance (PMI). PMI is pretty much like any other kind of insurance, and it protects the lender if you default on your loan and lose their money.
Home prices are still high right now because there is more demand than supply. Interest rates are still pretty high, so homeowners who were thinking about selling their home have not been able to sell, and they are stuck with a house that costs too much for what it is worth. The only way I see the housing market getting better in 2022 is if an influx of supply comes into the market. These homes would need to be more attractive than the other homes to sell. This means that there would have to be some renovations done.
There may be more supply of homes for sale after the dust settles and courts open back up nationwide for things like evictions.
The third big question I would ask someone about buying a home this year is: What are your financial plans for the next 5-10 years? If you plan on doing any overseas traveling or just working abroad, I would not recommend buying a home because, in a best-case scenario, you will lose money on the deal. On the other hand, if you plan to stay in America and put all that extra money towards their house by 2022, it will be a good time to buy a house.
What’s Next For Buying A Home?
Home prices should reach their peak around mid-2022, and from there, they will steadily decline until around 2028. Remember, this is just my estimate. Things could go differently if the country experiences another recession. We do a lot of front-end work at Artisan Realty to ensure we can have all the relevant information about real estate you need to buy a home in 2021.