3 trends homebuyers should watch for in July
Buying a home can be a tricky process, especially in today’s real estate market. If you’re planning to buy a home in July, here are some key things you need to know.
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1. Mortgage rates are still near their historic lows
We started 2021 with a 30-year mortgage at well under 3% on average. These days, you’re not going to find a fixed loan for less than 3% unless you can get a 20- or 15-year mortgage.
But make no mistake, today’s rates are still quite competitive. At the time of this writing, the 30-year average mortgage rate is only 3.148%. For every $ 100,000 you borrow, you will only pay $ 429 in principal and interest on your loan. Now, this amount does not include peripheral house expenses like property taxes and insurance, so you will need to factor that into your budget as well. But from an interest rate perspective, there are savings to be made.
2. Home values have skyrocketed
In May, the median listing price for a home was $ 380,000 nationally, according to data from Realtor.com. That’s a 15.2% jump from last year. Meanwhile, major metropolitan areas saw an average price increase of 7.4% compared to May 2020.
Of course, this figure of $ 380,000 represents SEO prices. But many buyers today find that they have to pay more than the asking price for a home to get an offer accepted. This is because so many homes in today’s market find themselves in bidding wars, where two or more buyers compete against each other over price in an attempt to influence a seller to work with them. .
3. The housing stock is still low
In May, the number of active real estate listings was down almost 51% from the previous year, according to Realtor.com. At the same time, the total inventory of unsold homes, including pending sales, fell by almost 21%. Newly listed homes are down 25.2% from the typical listing volume in the housing market between 2017 and 2019.
Limited inventory doesn’t make it harder to find a home that suits your tastes and budget. It also means that you will have to fight with other buyers for the available homes – hence the aforementioned bidding wars. Unfortunately, it can make buying a home more stressful. and expensive.
Another thing to note is that the real estate market has not experienced its usual spring real estate boom this year. Some sellers may delay listing their homes until they are more secure with the state of the economy and the pandemic. As such, more homes could hit the market in July, but we can’t say for sure if that will happen.
Should you consider buying a home in July?
Today’s mortgage rates make it a good time to buy a home, but inflated home prices could wipe out those savings. Be sure to set a home buying budget before you embark on a home search, because the last thing you want to do is take out a mortgage that’s too high and regret it after the fact.