Is Now a Good Time?

People often ask, “Is now a good time to buy?” or alternatively, “Is now a good time to sell?” In 2020 we witnessed record-low mortgage rates and record high demand, and thus far, 2021 has continued this real estate market trend. 

A January report by the National Association of Realtors (NAR) reported in January that the actual number of homes currently for sale stands at 1.28 million, down 22% from one year ago. Additionally, inventory is at an all-time low with 2.3 months supply available at the current sales pace. In a “normal” market, that number would be 6.0 months of inventory.

So, it would seem at first glance like a sellers’ market. But on the buy side, we know that in 2020, interest rates hit new record-lows 16 times! This makes many buyers wonder if they should hold out for even lower interest rates. 

According to Greg McBride, Chief Financial Analyst for Bankrate:

“As vaccines become more widely available and a return to normal starts to come into view, we’ll see mortgage rates bounce off the record lows.”

The good news is that only a slight increase is projected for 2021. And according to Freddie Mac:

“Borrowers are smart to take advantage of these low rates now and will certainly benefit as a result.”

As mortgage rates rise, the increase impacts the overall cost of purchasing a home. With this in mind, Len Keifer, Deputy Chief Economist for Freddie Mac, recommends taking advantage of current low rates:

“If you’ve found a home that fits your needs at a price you can afford, it might be better to act now rather than wait for future rate declines that may never come and a future that likely holds very tight inventory.”

Keifer is alluding to the ever-busy real estate season, spring, which is just on the horizon. While inventory is tight now, it may be even busier during the typical buying season.

The bottom line is that it behooves buyers to take advantage of the low interest rates now and sellers to take advantage of the current demand.

 

Debbie Austin is a realtor associate with Keller Williams, Roseville and has been helping clients buy and sell property in the area for 16 years. If you have a specific real estate question you wish to see addressed, contact Debbie at debbieaustin@kw.com or debbieaustingroup.com.