Home shoppers were thrilled last year when interest rates dropped to unprecedented levels below 3%. The Fed dropped rates to 0 in order to incentivize spending and boost the economy after the COVID-19 pandemic changed life as we know it. More recently, as the economy has stabilized due to mass vaccination and businesses reopening, the Fed has increased and in turn, so have mortgage rates.
Today, interest rates still remain at historically low levels, with Bankrate’s benchmark mortgage rate for a 30-year fixed at 3.2%. Although this is higher than the 2020’s low, it still remains relatively low in comparison to rates pre-pandemic.
Within the last decade, ever since the great recession, mortgage rates have steadily dropped which has balanced out affordability for home buyers in relation to home prices steadily increasing. As a result of rates dropping, home buyers see an increase in purchasing power. When rates decrease, so do monthly mortgage payments which is what increases affordability for buyers.
In addition to low interest rates, speculation of inflation is a hot topic among economists. Our country has passed trillions of dollars of necessary COVID relief packages to keep our economy afloat. Economists are concerned that because the government has had to create money from the federal reserve, the value of the dollar will significantly decrease. Several economists are recommending that to avoid loss, people should consider investing their liquid cash in more stable assets such as real estate. In combination with a low cost to borrow, now couldn’t be a better time to invest in your dream home.
Low interest rates have incentivized buyers to act, which in combination with the pandemic has caused low housing inventory nationwide. The combination of low rates and increased home values have also prompted homeowners to stay put and take advantage of low refinancing rates and leverage their equity to remodel or expand on their current home instead of moving.
Many buyers are motivated and eager to buy, but are having trouble finding the right home to fit their needs. Real estate agents around the country are having difficulty finding opportunities for their buyers in a seller’s market. Many buyers and agents share their struggles of endlessly searching the market for the right home for their family and in the rare occasion that a home does come on the market, it is usually flooded with offers and turns into a bidding war. This has caused widespread frustration and discouragement in the real estate market.
With BrightLeaf, there is a way to take advantage of today’s low rates and still get your dream home in today’s market. As a company developed around finding solutions in the housing market, we are here to help guide you through finding the perfect home for you.
Our solution is simple. When we can’t find what we want, we create it.
Several of our clients have resorted to building their dream home instead of passively waiting for it to be listed on the MLS. We are here to guide you through the process of what that looks like. In addition to our Lot Finder service where we help clients find vacant lots or tear downs to build on, we also offer a Find & Refresh service where we help clients find the perfect home to remodel and expand on. If you are tired of not being able to find “the one”, give us a call so we can show you what finding home looks like in 2021.
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