COVID-19 has now been part of our lives for over a year and it continues to shape our home buying trends. We don’t know exactly when there will be enough vaccines given to get us to herd immunity. It’s clearly not going away anytime soon. Even when it is no longer controlling our lives and economy, certain real estate and mortgage trends will be forever changed by this global event.
Fast-Moving Real Estate and Mortgage Markets
Of course, the real estate and mortgage markets have been impacted dramatically by the pandemic. With high buyer demand, low seller inventory, high home prices and historically low mortgage rates, 2020 was a whirlwind of a year for real estate activity and it’s not slowing down in 2021. We will have to see if mortgage rates start to creep higher, as that will definitely affect home buying trends.
Changing Home Buying Trends
One of the most interesting things to come out of the pandemic is how home buying preferences have changed. Buyers are looking for different features than they were prior to 2020, and many of these new housing trends are here to stay.
The National Association of Home Buyers (NAHB) reports that 13% of the households they surveyed in the 4th quarter of 2020 are considering purchasing a new home in 2021. This is the highest percentage since the 1st quarter of 2019. 61% of those surveyed represent potential first-time home buyers. Clearly, people are eager to buy and make a move soon, and much of this is driven by changing housing needs.
Prospective home buyers want to take advantage of market conditions—especially these low mortgage rates. They want to purchase their first homes, move up or refinance at a lower rate. This is sparking increased buyer demand and plenty of market activity.
What Are Today’s Buyers Looking for?
What buyers are now looking for is also interesting, as priorities have changed in the wake of COVID-19. We have more remote working and learning opportunities now, and those trends are likely to stick around long after the pandemic.
Working and schooling more from home will be the new normal for many Americans. This gives people more options on where they can live and affects the types of properties they are looking for. It may be less important to live in the city or in the suburbs if someone can work from home. Which school system you live in may also be less of a priority. Houses with home office spaces, home gyms and multi-generational living quarters (for college kids, grandparents or in-laws to move in) are increasing in popularity and driving up values for certain houses.
Who is Looking to Buy?
Driving these trends are home buyers in the Gen Z and Millennial generations, who respectively represent 81% and 70% of those hoping to buy a home in 2021 (according to NAHB data from Q4 2020). Meanwhile Gen X (50%) and Baby Boomers (25%) represent a much lower share of people looking to buy a new house this year. This all goes back to the high demand for first-time home buyers.
No matter who is buying or hoping to buy, the real estate market is moving quicker than ever. We have so much demand for new loans and home refinances while mortgage rates remain low. We do not know how long these conditions will last, though. If you are thinking about buying a new home or refinancing your current mortgage loan, contact Transparent Mortgage today or email me a email@example.com