Everyone keeps asking me: is the interest rate going to go up? Is it a good time to buy? Is rent cheaper than buying? Should we wait?
Current pandemic economy separates our lives in two segments: pre-pandemic and now. Since we are not out of the pandemic, yet we have learned to adjust since we are living in times that have no reference in the past.
It’s no secret that the US is experiencing the largest budget deficit in history. According to the Treasury Department, the US government has taken $3,59 trillion of tax receipts and spent $6.30 trillion, with a $2,71 trillion budget deficit. The US is currently in the 23 consecutive months of deficit. We are witnessing price inflation of +5.3%, the last time when inflation was up by 5% it was 31 years ago in 1990. Everyone has felt it differently and is yet to experience the depth Covid-19 market impact.
The United States is 3-rs largest country in the world with China being #1 and India #2. Population keeps growing and expanding, with millennials entering their home buying years. Homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in 100 largest metro areas. Lenders still want to lend and 29 % of major US banks have relaxed the lending requirements, helping with approval rates. As lending experts we are able to offer a variety of lending opportunities for teachers, medical professionals, foreign nationals, from buyers who need Down Payment Assistance to those that are looking for short term solutions with Jumbo loans and more! Renters tired of paying high rent are taking advantage of these programs becoming homeowners.
Real Estate investors seeing opportunities, taking advantage of low interest rates closing on 1 out of every 6 sales which is 17% of the purchases being done by investors. All of this keeps driving prices up in a market that is still experiencing supply shortage.
Home prices appreciated around the country and according to Corelogic real estate prices increased by 18% nationwide. And they are saying that supply shortage will unlikely be resolved in the next 5-10 years.
Pandemic-weary buyers are happy to put in a contract what's currently available on the market and everyone knows it's not much. New Homebuilders are aggressively trying to fill in the shortage and most are sold out.
Yet there are many exciting changes ahead of us. Our country is going through massive redistribution of resources. People are migrating, changing employment, and finding new ways of thriving. Digital money is becoming part of our everyday reality and more and more real estate transactions are offered for digital tokens like Bitcoins and alike.
It is interesting to note that Bahamas became the first nation to issue official digital currency in 2020, developed by a central bank and legally backed digital token.
Answering your questions experts are saying that interest rates will continue being low, for the time being. It makes financial sense to buy real estate now, if you are one of the many renters out there who would like to evaluate your ability to buy this year, contact us to get pre-qualified to prepare for your home search.
Yelena Brezhneva
Mortgage Loan Advisor & Realtor
NMLS#2084403 | CA DRE 02087480 |FL SL3477632 |NV S.0180578
