Buying a home is always a challenge for new homeowners. Some years the challenges are greater than others. In that respect, 2021 was an unusual year because of the fluctuations in the housing market due to changes in the economy.
The pandemic in the spring of 2020 was a nightmare for the people directly affected. It also had a negative effect on the real estate market. After a period of unprecedented panic and fear, the market quickly recovered.
Here are some of the real estate trends that emerged in 2021.
1. There were fewer homes for sale.
One of the most important decisions in a person’s life is to buy a home. Shopping for a new house can be overwhelming.
There was also so much competition. Some homes sold within weeks. Others sat on the market for months before selling. The fact that there were fewer homes for sale increased this level of competition.
2. Home prices rose.
At the beginning of the year, home prices shot up by almost 20%.
Low inventory and growing demand were among the factors contributing to the rise in home prices. Buyers were also looking for less expensive housing options.
3. Lower mortgage rates.
Mortgage interest rates reached an all-time low! A 15-year fixed-rate mortgage currently had an average rate of 2.2 %. These low rates encouraged new homeowners to refinance to lower their monthly payments. Some decided to buy a more expensive house.
4. Online real estate services were growing.
Finding a home had never been easier thanks to real estate services like Zillow. Homebuyers could view a listing of homes for sale online or list their own home with a few clicks.
5. Creative, risky ways to buy a home.
Rent-to-own is a new type of mortgage that enabled borrowers to rent a house or condo and then use their rental payments to purchase the property. With this lending option, a borrower can borrow a large percentage of the purchase price.
Conclusion
Most people buying a home for the first time find it a daunting task. The unusual conditions of 2021, such as fewer houses on the market, higher prices, lower mortgage rates, easy access to buying through online real estate services, and creative ways to buy a home provided unique challenges and opportunities for homebuyers.