What to Expect in 2021
COVID-19 vaccines are on their way, but the pandemic-driven housing prices may be here to stay in 2021. Forecasts predict home prices will rise by 5.7%. Mortgage rates were at all-time lows for 30-year fixed-rate loans near the end of 2020; expect them to creep slowly upwards in 2021, potentially reaching 3.4% in the second half of the year. While rate increases may create some affordability issues for buyers, more homes are likely to become available in the last six months of 2021, which will better balance supply and demand in the market.1
A Place to Live or an Investment?
A home is both a residence and an investment. Buying at the right price, obtaining a historically low rate, or refinancing when the math makes sense, can boost the chances of a real estate purchase becoming a great investment over time. Owning a home allows you to build equity, profit from any price appreciation, and possibly benefit from tax perks related to deductions for mortgage interest and property taxes. As with any investment, your home should be one part of a diversified portfolio that includes retirement accounts, an emergency fund, and other assets with appreciation potential, such as stocks and bonds.2
Is Saving $100 a Month Worth Refinancing?
Refinancing can save you on your monthly mortgage and give your budget some extra wiggle room. But if you only save $100 a month, is it worth the expense and effort? Consider that your closing costs will likely total between 2% to 5% of your new loan's principal balance. On a $200,000 loan balance, that's a minimum of $4,000 out of pocket. Saving $100 per month, it would take you 40 months - more than three years - to recoup your closing costs. If you plan to stay in your home for four years or more, refinancing might be worth it.3
Homebuying Basics: Down Payments
When buying a home, most lenders will want you to make a down payment. A down payment is a lump sum you pay upfront. The remaining amount of the home's purchase price is what you finance through the bank. Generally speaking, a larger down payment can make getting approved for a mortgage easier and allow you to buy more house for the same monthly payment, or even less. The industry standard is a 20% down payment. Often you can put less down, but the lender usually will require you to purchase mortgage insurance.4
Buyers Seeking Walk-in Pantries
The walk-in pantry has become the most desirable kitchen feature for homebuyers, with more than 85% of homes larger than 3,500 square feet featuring one. Features of luxury pantries can include built-in shelves, quartzite countertops, hardwood floors, spice-rack pullouts, wine storage columns, and built-in lazy susans for added storage. Homeowners can find inspiration on Pinterest and Instagram to organize their food and kitchen items in a practical and visually appealing way.5
Sources: Realtor.com; USA TODAY ; The Mortgage Reports; msn; Realtor MagazineShare:
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