“Wealth is the ability to fully experience life.” –Henry David Thoreau
As we celebrate Independence Day in the United States, the summer real estate and mortgage markets offer us opportunities to celebrate our own financial freedom and independence. Home sellers see their home values hit higher than they could have ever imagined. Homebuyers are buying their homes with the lowest mortgage rates we have seen in years. Homeowners have a unique opportunity to restructure their mortgage terms to remodel their homes and lower overall debt costs.
Looking into the future for the real estate and mortgage markets, Lawrence Yun, chief economist for the National Association of Realtors, predicts that we will see more houses available for sale in the second half of 2021 due to the government forbearance program ending and homebuilders building more homes.
Lawrence Yun continues his predictions saying, “Home price growth will steadily moderate with the increased supply of homes for sale, but the decline in prices is unlikely.” Mr. Yun explains that the low mortgage rates are compelling more and more homebuyers into the home buying arena. In addition, low inventory looks to keep the real estate market strong into 2022.
Aside from the home buying market, renters are not feeling as much freedom as rents continue to increase. As a result, more renters are pulling up stakes and striking out to buy their own homes. Millennials are leading the charge, making up the largest segment of the home buying market. Generation Z is stepping into action too.
The Federal Reserve is talking about winding down the celebration on low mortgage rates with their plan to taper their mortgage-backed-security purchases. As a tool to keep the mortgage rates at historic lows last year, the Federal Reserve started buying billions of dollars in mortgage-backed securities each month. However, now that the job market looks like it may be moving back to normal, the Fed has indicated they may wind down the aggressive buying, which would pressure mortgage rates to rise.
Here are some areas that are trending:
1. First-time homebuyers make up over 30% of homebuyers in many areas around the nation.
2. Intergenerational bonding has been a growing trend for the last decade. This trend occurs when parents move in with the adult children or children and grandchildren to move under the same roof with the parents or grandparents.
3. High home values and low mortgage rates create an excellent opportunity for homeowners to refinance and restructure their debt, remodel their homes or reinvent their lifestyle.
4. Relocation for people who are making moves for employment in a post-pandemic marketplace.
As real estate and mortgage professionals, how can we get invited to be on the journey with our customers who want to buy a home or sell a home? How can we position ourselves to be the resource for those clients who want to remodel their homes or restructure their finances? Become known as a specialist in areas of expertise that interests the people who will be your customers.
