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If you want to buy a home in the next year, it’s important to keep up with predictions and trends when it comes to mortgages. Financial experts assert that low mortgage rates will continue as we enter 2021, and are likely to remain throughout the year. There’s even a good chance that the standard mortgage rate will drop to 2.5%, or perhaps lower. At the end of June 2020, the average rate for a 30-year mortgage was 3.42%. The organization took a survey of the biggest lenders in the country to come to this percentage.
Anticipate Low Mortgage Rates
Mortgage rates will likely reflect the overall direction of the country’s economy in light of the pandemic, according to Point Loma Nazarene University’s chief economist Lynn Reaser. She states that if the economy recovers, mortgage rates will increase. Reaser asserts that home mortgage rates will probably increase by at least one-quarter by the spring or summer of 2021. This means that rates will go from 3.5% to 3.75%, which could mean a significant increase in monthly payments or a down payment for you if you’re trying to purchase a home. Reaser says the rates will likely go up if a coronavirus vaccine becomes available, since this will help bring the economy up to speed.
It’s important to keep in mind that medical researchers may not find a vaccine in the next year or so. The second wave of the pandemic could slow the economy down even more and decrease mortgage rates. While this isn’t good news for the country as a whole, it is good news for you if you’re in the market to buy a house. Reaser shares the mortgage rates could fall below 3 percent if the economy stays in lockdown, since people will once again be confined to their homes and won’t want to come in contact with real estate agents or mortgage officers. However, she shares that the likelihood of this happening is around 20%.
Find a Great Program
While the coronavirus pandemic caused significant uncertainty in the housing market, mortgage rates are predicted to stay in this range until the middle of 2021, although this is not a guarantee. For instance, some experts state that the rates could go lower than 3% in 2021, while others say the rates for mortgages could go up to 3.5%. This, of course, will depend on how well the American economy is able to recover from the pandemic, as well as all the other financial events that have affected the economy for the last few decades.
Getting the best mortgage may be a matter of researching mortgage programs to get a rate you can lock in quickly. This could be the best year to get the home you’ve always wanted, since there’s a higher chance you can afford to complete the purchasing process in the timeframe you want.
Learn About the Federal Reserve and Mortgage Rates
It is predicted that the 2021 housing market will be a beneficial one for potential homeowners. The economy will likely be very slow, and this will affect mortgage rates. This also means that real estate agents will be more likely to work with you to help you get into the home you want by contacting mortgage lenders for you and reminding you about important paperwork you may need to submit to complete the purchase process. If you’re keeping your eye on mortgage rates so you can determine the best time to purchase your home, it’s important remember that the presidential election is coming up soon. The Federal Reserve typically maintains a low profile during election years. However, this year has been unprecedented in unexpected events, which means the Fed has tried to revive the U.S. by supplying trillions of dollars to combat the recession brought on by the pandemic.
It’s no secret that low mortgage rates are a great thing for home buyers and current homeowners who want to refinance their mortgages. However, these rates can also raise the overall cost of homes, which means you won’t be saving as much as you thought, despite the low rates, according to Churchill Mortgage CEO Mike Hardwick.
Although low rates are generally beneficial to homeowners and buyers, they increase the overall price of homes, which cancels out the savings that come from these considerably low rates, observes Mike Hardwick, CEO of Churchill Mortgage.