In her spare time she works as a tailor and pattern maker for film and TV. Whether you should buy a house now or wait until 2021 will depend on a lot of factors that we break down in this article. The impending recession is a major concern for buyers and sellers and the real estate market will be affected. Nothing is ever set in stone when it comes to the economy and labor markets. Point being: This will eventually pass. “Having a minimum down payment of 20% will allow you to negotiate better loan terms in addition to lower your monthly payments, lowering the risk of a foreclosure.” That said, there are plenty of reasons to get your foot in the homeownership door before you’ve saved up a full 20%, so talk to a trusted financial advisor about your options. Almost 44% of surveyed agents predicted their local markets will trend toward a softer one, and 15% think that 2020 may even transition into a buyer’s market. A minimum down payment of 20% will also help protect you from changing loan standards in case of lender overlays. What this means is that people need to be ready to buy, Cleffi explained. The point is, you have to consider the very real possibility that you might only be seeing a small slice of the market. This is partly due to stimulus measures taken by the Federal Reserve, announced earlier this month. We can also expect to see more foreclosures in the coming months, which can be good deals for investors looking for lower prices. Some economists are now saying we’re already in a recession, and that it will probably get worse before it gets better. You will want to research the most recent home price trends in your area – if they’ve been consistently rising over the past few years then the market there will be less at risk of a downturn that could sucker your investment. Find top real estate agents in all major US cities. “I do think things will change at the end of 2020, but I think it will change because it’s time for change in our current cycle.”. So, should you buy a house now or wait until 2021? Those who wait until next year to buy could encounter higher mortgage rates. Product prices and availability are accurate as of the date/time indicated and are subject to change. Can You Consolidate Debt Into A Home Loan? After all, they can’t go much lower than where they are right now. The coronavirus pandemic is temporary. On the other hand, if you feel your future employment and income are vulnerable, you might be better off waiting until 2021 to buy a house. Interest rates are expected to remain low throughout 2020 and rise in 2021. Will the U.S. Housing Market Crash in 2021? In fact, the rate of decline could accelerate. Construction, health care, transportation, and warehousing industries showed significant employment rises — and that rise in construction employment could indicate an increase in new homes, too. Something else to keep in mind when sifting through data and analysis is that most things operate and change in cycles. The real estate market is cyclical in nature – if there is a downturn now we can expect to see an upturn in given enough time. They worry they’re about to make a mistake, buying a house in what could be the start of an economic recession. Trying to predict whether or not home prices will rise significantly in your local market is a difficult game. It’s important to note, too, that most of this data does not include the millions of workers who fall into the “gig economy” — Lyft and Uber drivers, freelance writers, consultants, and other independent contractors. If it’s going to be for many years, you have less to worry about in terms of your real estate investment. Here they are…. Here’s how to think about timing your home purchase. Of course, if you’re paying cash for a house, this question becomes less important. Which brings us back to the question at hand: Should you wait until 2021 to buy a house? But paying for a bigger one can be even tougher. To answer that question, you have to think about your current employment and income situation. So this is a valid concern for a lot of people. At the end of 2019, Freddie Mac’s economic research team predicted that 30-year fixed mortgage rates would average around 3.8% throughout 2020 and into 2021. All rights reserved. The bottom line: Mortgage rates are currently hovering near an all-time historic low. More affordable areas, where a resident with average income can easily afford to buy, are generally less likely to experience price declines in a recession. Yes, there’s lots of data and speculation available but, ultimately, the questions you probably should be asking should have more to do with your own personal financial picture than that of national averages. Homelight has an A+ rating with the Better Business Bureau. This is another key consideration when deciding whether to buy a home now or in 2021. The previous record was 695,000 claims, filed during the week ending October 2, 1982. Today, we’ll address a question that’s currently on the minds of many home buyers, as we move into what would normally be a busy home-buying season. Those 1.6 million houses in turn represent a year’s typical new construction supply. There’s a lot to consider, and the decision may seem overwhelming. Our advice for home buyers is to think long-term. Phoenix Housing Forecast for 2021: Above-Average Price Growth Ahead? So, should you buy a house now or wait until 2021? Altogether, this means that if you are in the market for a property right now, you may not be seeing all the options that could become available later in 2021 when circumstances will be more clear. This all changed in March 2020, when unemployment spiked, and experts think we can expect to see the rate climb post-coronavirus lockdown. This is expected to be a short-term phenomenon as lenders work through their backlog.”. With better health and easier access to — well, almost everything via the internet — people aged 65 and up have less motivation and fewer reasons to sell their homes. There are five key points buyers should consider, before making this kind of decision. So what has been fueling the seller’s market over the past few years? Ready to get started with your hard money loan from New Silver? A shorter stay, on the other hand, could bring more risk into the picture. This is good news for those hoping to buy in 2020; an increasing number of agents think that home prices will become more affordable in 2020 as a result of the coronavirus. Summer 2020 Update, HUD Has Been Politicized and Ben Carson Should Resign, 5 Predictions for the California Housing Market in 2021: Sales, Prices & More. It’s a simple tool designed to help real estate investors make informed decisions. If home prices in your area have leveled or started to dip in recent months, there’s a good chance that downturn will continue as the economic turmoil drags on. CoreLogic, a data reporting analysis company, predicted that home prices will increase 4.8% in 2020. According to a January 2020 press release, the Fannie Mae Economic and Strategic Research Group (ESR) expects “consumer demand to re-establish housing construction as a significant contributor to economic growth” in 2020. Perhaps the most significant thing to consider when whether or not you should buy a house in 2020 or wait until 2021 is what kind of savings and reserve accounts you have and what your current housing configuration looks like — is it the right time for that to change? Apply today. Sharing a small space is tough. In that scenario, it might be best to wait until 2021 (or at least the latter part of 2020) to buy a house. Add to this the rising demand among millennials for entry-level housing and the low inventory problem is even more pronounced. Wait to see how the neighborhood holds up during the pandemic. Why Time Is of the Essence, 8 Backyard Patio Ideas for Creating Your Own Personal Oasis, an unforeseen event (like a pandemic) will influence your decision to buy a house, the seller’s market that dominated most of 2019 will slowly shift to a more balanced one during 2020, an increasing number of agents think that home prices will become more affordable in 2020 as a result of the coronavirus, prepared before beginning your search in earnest, indicates that new home construction is increasing, expects “consumer demand to re-establish housing construction as a significant contributor to economic growth” in 2020, what kind of savings and reserve accounts, help protect you from changing loan standards in case of lender overlays.