Buyer demand increased in 2020 as low mortgage rates made the idea of homeownership more affordable and appealing. But if you missed the boat in 2020, should you aim to buy a place of your own in 2021? Here’s why that potentially is — and isn’t — a good idea.
The upside of buying a home in 2021
The primary benefit of buying in 2021? You’re likely to snag a low interest rate on your mortgage.
Though there’s no saying to what extent rates will fluctuate in the course of the year, we know that they’re starting off at historic lows. Plus, the U.S. economy is still in bad shape as we kick off 2021, so based on that alone, rates are unlikely to climb rapidly anytime soon. They may slowly but surely begin to creep up as the year goes on, but all told, rates should stay low for at least another year, if not longer. And the lower your mortgage’s interest rate, the less money you’ll pay each month on your loan, and the less interest you’ll pay all in.
The downside of buying a home in 2021
High demand has driven home prices up, so if you buy in the first half of 2021, you’re likely to pay a premium. That could, in turn, negate a fair amount of your mortgage savings, even if you score an ultra-competitive rate.
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