3 trends homebuyers should watch for in June
If you are planning to buy a home in June, you need to know how the market is going.
Buying a home is an important decision in life, so making sure the time is right is essential. The most important thing to consider when making this choice is your own financial situation. This includes if you have:
However, it may also be a good idea to pay attention to trends in the housing market. So, if you think this summer seems like a good time to buy a home, there are three big trends in June that you should watch out for.
1. Housing stock is expected to increase
Last year, due to the pandemic, there was a significant slowdown in the outbreaks listed. But there are some promising signs that things are changing. In April 2021, for example, 32.6% more homes were listed compared to April 2020 at the start of the pandemic.
And conditions have improved rapidly in the United States since then. State governments and the United States federal government have now taken substantial steps to ease coronavirus restrictions. And a growing share of Americans have been fully immunized.
The end of lockdowns and hope for a new virus-free era could lead to both a strong economic recovery and a desire to return to normal life. And that will likely result in more people deciding to list their homes so they can take advantage of a competitive housing market.
In fact, a recent survey found that home inventory could rise in June, as around 45% of potential sellers plan to list their homes by the end of June, according to Clever Real Estate.
As more and more homes are listed, it is likely that the pace of new home sales will increase as buyers who were looking finally find properties that meet their needs.
Buyers can prepare for an influx of properties on the market by making sure they’re ready to jump on a property when it becomes available.
Start by getting pre-approved for a home loan. This will ensure that you are shopping in the correct price range by confirming the amount you can borrow. Pre-approval is also important because when you make an offer, most sellers expect to see proof that you have been approved to borrow the necessary funds.
In addition to the pre-approval, you also need to make sure that your down payment is ready. Ideally, you’ll be putting in about 20% down, but you can often borrow with as little as 3% or less. You’ll also need to be prepared to cover closing costs so that you can be flexible about your buying schedule. So when the seller is ready, you will maximize your chances of your offer being accepted.
2. House prices will remain competitive
While more inventory can theoretically help bring prices down to more manageable levels, the fact is, there is a lot of pent-up demand for properties. And when sellers list their homes, they usually have to buy new ones. This means that demand doesn’t always drop as much as you might think when new listings flood the market.
Unfortunately, prices are likely to remain relatively high over the next several months, even as more homes come onto the market. This is all the more true as material shortages and supply issues related to COVID have made building new homes difficult and expensive.
Indeed, the data of Red tuna recently revealed that about half of all homes are now selling for above their asking price. This is a 23 percentage point increase in the number of homes sold above the list price, and it’s one of the main reasons home prices overall have increased by 24%. compared to the previous year. And this trend is expected to continue.
Buyers may struggle to find affordable housing as median prices hit record highs, and multiple-offer situations are likely to continue to occur on properties in many markets across the United States. In this seller’s market, it’s essential that buyers keep a cool head when looking for a home.
Make sure you know how many homes you can afford. And don’t get caught up in a bidding war that gets you over your spending limit. By researching property values in your area, setting a strict spending limit based on your budget, keeping an open mind and reminding yourself that there is always another home, you can hopefully avoid paying too much for a property in this competitive market.
3. Mortgage Prices Still Trending Near All-Time Lows
There is good news for future homeowners, however: current mortgage rates remain relatively competitive.
Rates are well above the record lows we’ve seen in the heart of the pandemic. But that doesn’t mean that rates aren’t yet very low compared to historical averages. In fact, the average interest rate on a 30-year fixed rate loan was 3.133% as of May 28, 2021. For comparison, in 2019, the average annual rate of 3.9% was described as one the lowest of the past five decades. .
Finding the lowest possible rate can take time, so it pays to start looking for a mortgage as soon as possible. As mentioned above, you’ll want to get pre-approved early in the process, and it’s important to compare quotes from at least three lenders before committing to borrowing from one.
Once you’ve been approved, you may want to consider locking in your rate in case interest rates continue to rise. A mortgage rate freeze means lenders will allow you to borrow at the promised rate, even if interest charges go up before your loan closes. Often times, lenders will allow you to do this for free, although sometimes there is a minimal fee.
Since rates are very low right now and will likely remain very competitive in June, this is still a good time to borrow to buy — provided you can find the right home to buy at the right price.